Dublin Airport may charge airlines more, CEO says

Operator DAA has added new aircraft stands and boarding areas at airport over past year

Terminal 2 at Dublin Airport – further improvements would have to be paid for from airline fees. Photograph: Matt Kavanagh

Terminal 2 at Dublin Airport – further improvements would have to be paid for from airline fees. Photograph: Matt Kavanagh

 

Dublin Airport could seek more cash from airlines to help pay for further improvements to its facilities, according to its chief executive, Kevin Toland.

The airport’s operator, State company DAA, has added new aircraft stands and boarding areas since last year, and this week opened an extension to pier one, the departure area used mostly be Ryanair.

The DAA’s annual report, published on Tuesday, shows that it earned profits of €108 million last year on a turnover of €793 million. The company, responsible for Cork and Dublin airports, had net debt of €523 million on December 31st.

Publishing the report, Mr Toland said that Dublin Airport wanted to consult about further possible investment with its biggest airline customers, led by Ryanair and Aer Lingus, and the Commission for Aviation Regulation (CAR), which determines what it can charge carriers.

However, he indicated that the airlines would ultimately have to cover the cost of this through passenger charges. “We are not going to do anything that customers do not want, but we can’t do anything unless we are paid for it,” Mr Toland said.

Passenger predictions

Under the terms of a CAR ruling, Dublin Airport can charge airlines up to €9.45 a passenger this year. The regulator’s ruling dates back to 2014 and was based on a prediction that passengers numbers would grow to 24.9 million by 2019. Dublin expects to handle about 30 million in 2017.

Mr Toland argued that it did not make sense to wait for the next CAR ruling on charges, which is due in 2019, when the fees will be cut to €8.68. Instead the airport is seeking a mid-term review of the current regime in light of the unexpected rate of growth in passengers.

The regulator has agreed to the review. Mr Toland said that if the airlines did not take part or decided that they would not seek further improvements, then DAA would not add anything more to its facilities beyond what was agreed in 2014.

Both he and DAA chief financial officer Ray Gray pointed out the airport could not borrow money to pay for improvements and use revenue from subsequent growth to repay the debt, as the regulations required it to add this cost to its charges. “What the regulatory formula means is that if it is put on to the asset base, in the long term, we have to be paid for it,” Mr Gray said.

Airline concerns

The DAA and the airlines generally clash when charges come up for review and over the cost of new facilities . Both Ryanair and Aer Lingus have raised concerns over the estimated €320 million bill for Dublin’s new runway.

Mr Toland would not comment on three legal challenges brought against Fingal County Council’s decision to extend planning permission. However, he pledged that the airport would continue to consult with locals in north Dublin to tackle their concerns.

He is due to leave the airport operator in six months for food group Aryzta. DAA chairman Pádraig Ó Ríordáin warned that rules limiting State company chief executives’ pay to a maximum of €250,000 a year could make it difficult to find a successor.

“Kevin was very public-minded to have taken the job and then put every bit of energy he had into it,” he said. “Clearly the cap on pay is way below the market. It really does have to change.”

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