Privatisation of airport terminals would benefit passengers, report finds

Second runway at Dublin Airport and independently owned third terminal advocated

Terminal 2 at Dublin Airport: an independently owned third terminal at Dublin is an “appropriate response” to anticipated passenger growth and is deemed to be required by 2031.  Photograph : Matt Kavanagh

Terminal 2 at Dublin Airport: an independently owned third terminal at Dublin is an “appropriate response” to anticipated passenger growth and is deemed to be required by 2031. Photograph : Matt Kavanagh

 

Multiple airport terminals across Ireland could be privatised in future to increase competition among terminal operators and benefit airlines and their passengers, a report for the Government has found.

The report for Minister for Transport Shane Ross on the future capacity needs of the three State airports of Dublin, Cork and Shannon was considered by Cabinet on Tuesday.

For Dublin Airport, the report, expected to be published by Mr Ross on Wednesday, says that a second runway and a third terminal are likely to be required, with passenger numbers travelling through the airport predicted to hit 54 million by 2050.

An independently owned third terminal is found to be an “appropriate response” to anticipated growth and would be required by 2031. It concludes that an independent terminal, not owned and operated by the Dublin Airport Authority (DAA), the State-owned commercial company, is “feasible and maximises choice to airlines”.

However, it further argues there may be scope for privatising even more terminals and raises the possibility of “additional competition by privatising other terminals”.

‘Competitive tension’

A memo to Tuesday’s Cabinet meeting on the report says transition arrangements to “an independently operated terminal model” may be needed, adding that “transition arrangements could lead in the short term to financial pressures on DAA as a result of ‘stranded’ assets or labour”.

“On the other hand, airlines would have choice of terminal provider and this clearly would bring a competitive tension into play to the benefit of airlines and their passengers.

“In the competitive terminal scenario, the competitive tension would reduce as spare capacity falls away and there may be a need to introduce regulation of terminal charges at that point to avoid negative consequences for airlines and passengers,” the memo adds.

In introducing such a system, however, there would have to be “even-handed” regulation of charges to access airport infrastructure, such as the runways. Arrangements would also have to be put in place to ensure the future efficient development of the entire airport.

Road network

Mr Ross has said a decision will be taken early next year on whether to build a third terminal at Dublin Airport, and the report urges an examination of the road network around the airport to assess how it could handle additional capacity.

He told RTÉ that consultation was beginning immediately with stakeholders, such as Transport Infrastructure Ireland, the DAA, Fingal County Council and members of the public.

He said the earliest the terminal would be built, if a decision was taken to go ahead with it, would be 2030 or 2031.

The report, conducted by Oxford Economics, an organisation that specialises in global forecasting and qualitative analysis, would now go to public consultation, said the Minister with responses anticipated from the DAA and Fingal County Council.

The DAA has said it has not yet seen the new report. “The DAA’s consistent position over the past two years has been that Dublin Airport does not need a new terminal at the moment,” a spokesman said.

“This new report seems to fly in the face of the State’s national aviation policy, which was only adopted three years ago, as it made no reference to a possible independent terminal at Dublin Airport in the medium term.”