Regulators rebuff Dublin Airport bid for price hike

Regulators have rebuffed Dublin Airport owner DAA’s bid for a 70 per cent increase in passenger charges by 2026.

DAA recently asked the Commission for Aviation Regulation (CAR) to increase Dublin Airport’s passenger charges from a cap of €8.24 now to €14.77 by 2026, to aid investment and meet rising costs, including hiring new security staff to avoid recent bottlenecks.

However, the commission proposed on Friday to limit the charges, levied on airlines, to an average of €8.52 over that period.

In a statement, the regulator proposed capping Dublin’s passenger charges at €8.68 next year, €8.60 in 2024, €8.29 in 2025 and €8.48 in 2026, well below the figures sought by the airport operator.

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“If Dublin Airport delivers its capital investment programme as planned, the price will increase further, up to €9.81 per passenger by 2026,” the commission added in a draft decision.

The CAR calculates that this will allow Dublin Airport collect €1.2 billion from charges over the four years while it will earn a further €1.15 billion from commercial revenues.

Regulators believe Dublin Airport will handle 30.1 million passengers next year against DAA’s 27.7 million forecast while costs will rise at a slower rate than the DAA calculates. The CAR calculates it will cost the airport less than the DAA estimates to raise the cash needed for investment.

Deputy commissioner David Hodnett noted that the commission believes that, by 2025, passenger numbers at Dublin will overtake the 32.9 million record set in 2019.

“The proposal reflects confidence in the rebound in aviation traffic levels and the return to growth,” he said. “We have made capital investment allowances of €2.9 billion, which, when completed by Dublin Airport, will provide capacity to handle 40 million passengers a year.”

The CAR will decide finally on Dublin Airport’s charges later this year, following consultation with DAA, airlines and others.

DAA explained earlier this month that its proposal “takes into account changes in operating costs which are now necessary for the successful running of security at Dublin Airport”.

The company is recruiting up to 900 security officers. About 1,000 passengers missed flights on May 29th as a result of delays caused by a mix-up in rostering frontline staff. DAA says steps it has taken since have cut queuing times sharply.

The State airports company responded on Friday that increasing passenger charges had virtually no impact on the price of a flight but could materially affect Dublin’s standard of service and capacity.

“DAA will take time to review CAR’s draft determination report in detail and will respond to the consultation process,” it said.

Dalton Philips, DAA chief executive, told regulators earlier that two years of Covid curbs had cost the airport €500 million in earnings. “The current levels of airport charges cannot sustain the tide of countervailing pressures,” he warned.

Dublin’s biggest airline customer, Ryanair, demanded that the CAR cut the airport’s charges over the next two years rather than “rewarding it for mismanaging customer service”.

Eddie Wilson, chief executive of the group’s biggest subsidiary, Ryanair DAC, argued that the regulator was giving Dublin Airport 20-40 per cent increases.

The airline calculated that under the commission’s draft decision, Dublin would receive a 20 per cent increase over the next four years, before inflation, which could add a further 10-20 per cent.

“CAR should play its role as an independent regulator, and demand that Dublin Airport lowers it charges until such time as it proves it can deliver an acceptable airport and terminal experience for customers,” Mr Wilson said.

Dublin’s other key customer, Aer Lingus, said it would review the regulator’s proposal and take part in the consultation.