Ryanair may sue aviation regulator over charges

Ryanair is considering taking legal action against aviation regulator Cathal Guiomard following his decision yesterday to allow the Irish Aviation Authority (IAA) to increase its air traffic control charges at Dublin, Cork and Shannon airports up to 2011.

The regulator has given the green light for the authority to increase its charges to airlines from €1.94 per metric tonne of weight to €2.04 for the reminder of this year. From January 1st 2008, the IAA can increase the charges to €2.20. It charges airlines per weight of their aircraft.

Mr Guiomard has also left scope for further increases when the authority has completed new air traffic control towers in Cork and Dublin airports. These are projected by the IAA to cost a combined €54.5 million.

Jim Callaghan, Ryanair's head of regulatory affairs, criticised the increased charges and said the low-cost airline would consider a legal challenge. "We are looking at it in terms of another legal challenge," Mr Callaghan said. "We have a regulator who only seems to know how to allow a monopoly to increase its prices. There seems to be no end to the price increases."

Mr Guiomard said his decision followed "careful scrutiny" of the IAA's cost projections. "This provides for a real annual increase in the unit charge of 3.75 per cent for the years 2008 to 2011, driven mainly by high levels of forecast capital investment over this period," he said.

Ironically, the IAA gave a guarded response to Mr Guiomard's decision yesterday. In a statement, the IAA said: "This is a comprehensive determination from the Commission for Aviation Regulation, which will need to be examined and analysed by ourselves before we can make any detailed comment."

It had sought an increase in revenues to fund capital expenditure of €103 million up to the end of 2011. The regulator has allowed it to raise revenue to cover €43 million of this. A decision on charges relating to the cost of the new towers at Dublin and Cork will be made on their completion.