Dublin Airport spat with Ryanair as airline flies off

Airline and airport will patch things up over incentives row but relationship is never easy

 

Ryanair’s and Dublin Airport’s clash over incentive payments this week might have lacked some of the sparks that have flown over similar issues in the past, but it reminded the rest of us that there will always be some tension in the relationship.

Dublin’s incentive scheme is meant to encourage airlines to increase the number of passengers they bring to the gateway. In broad terms, if a carrier exceeds an agreed number, the airport refunds some of its charges. According to its managing director, Vincent Harrison, it has repaid €34.2 million in this way since 2001.

Ryanair says the airport’s operator, State-owned DAA, has yet to decide on renewing the scheme for next year, something the airline expected it to do last March. DAA insists the existing arrangement remains in place.

Ryanair is moving 3 per cent of its capacity in Dublin, the equivalent of about 1,580 flights a-year, to other European airports. While Brexit is a factor in this, both the airline’s chief executive, Michael O’Leary, and chief marketing officer, Kenny Jacobs, insisted this week that the dispute over the incentive scheme is the main reason for the move.

New runway needed

Dublin looks likely to handle 27 million or so passengers this year, a new record. It needs a new runway and other constraints are emerging there. Earlier this year, Aer Lingus chief executive Stephen Kavanagh and Willie Walsh, his opposite number at that airline’s owner IAG, highlighted problems that largely affect the recently built terminal two.

It may well be that Dublin cannot grow much more until it deals with those problems. However, that does not mean that it will not renew, or continue with, its incentive scheme. All airports have them, so it will not want competitors to steal too much of a march on it.

In any case, for different reasons, the airport is likely to be keen to continue to support the growth, and in particular that of its two biggest customers, Ryanair and Aer Lingus. On that basis, it seems fair to speculate that whatever confusion now surrounds the incentive scheme will be cleared up relatively quickly.

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