Lasting damage could be done to Irish economy if passenger cap at Dublin Airport is not lifted

Aviation delivers very important economic and social benefits to the island of Ireland and the access, connectivity and growth provided through Dublin Airport is critical.

The importance of Dublin Airport as a strategic national asset and a key driver of the Irish economy has never been clearer, particularly as the airport faces two crucial planning uncertainties in 2024. If these uncertainties are not urgently addressed, lasting damage could be done to the Irish economy.

The first and most damaging risk is the 32 million passenger cap at Dublin Airport. This cap dates from a Terminal 2 planning permission granted in 2007 and was mainly due to the ground transport infrastructure serving the airport. That infrastructure can handle many more than 32 million passengers.

There is now a risk that the cap could be exceeded in 2024 and in subsequent years, constraining any growth. This cap should have long since been increased, something that is now urgently required.

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The second issue relates to the planning conditions regarding night-time flights. Applying such conditions in a manner that would reduce current levels of night-time flights (including key first-wave departures between 6am and 7am) would severely impact connectivity.

...for every one million passengers not allowed to arrive into Dublin Airport every year, some €1.4 billion would be lost to the economy in direct, indirect and induced expenditure

The new noise quota scheme approved by the Aircraft Noise Competent Authority as an alternative to these planning conditions is a modern, workable compromise for Dublin Airport, its users and local residents, but this solution is currently being appealed to An Bord Pleanála.

It is to be hoped that An Bord Pleanála will confirm the noise quota scheme early in 2024, so removing one of the uncertainties.

A recent report by Jim Power Economics starkly illustrates the impact on a small open island economy with a strong dependence on tourism and foreign direct investment, of a failure to quickly resolve these planning issues.

The measurable impacts are that for every one million passengers not allowed to arrive into Dublin Airport every year, some €1.4 billion would be lost to the economy in direct, indirect and induced expenditure, while €322.1 million would be lost to Revenue in taxes foregone. Also, 37,000 direct, indirect and induced jobs would be lost.

[ Passenger limits threaten to hamstring Dublin Airport and damage economy ]

The report emphasises the importance of foreign direct investment to the Irish economic model and notes that reduced air connectivity would undermine Ireland’s attractiveness for such investment. It also refers to tourism industry projections of growth in receipts from a current level of €10 billion to a level of €15 billion by 2030.

If the planning uncertainties were to prevent that growth occurring over the period 2024 to 2030, up to €15 billion in tourism revenue could be lost, the opportunity for 65,000 new tourism jobs missed, and €3.6 billion in increased tax revenues sacrificed.

A tactical proposal was made by Dublin Airport that would impose a ban on charter and ad hoc flights in order to try to manage capacity within the 32 million passenger cap. This would damage major international tourism events such as the Europa League Final in soccer and the US College Football Classic, both taking place in the Aviva Stadium in 2024.

The report by Jim Power Economics estimates that the banning of charter flights for once-off high-profile events would cost the Irish economy at least €500 million a year. Aside from the significant economic and reputational damage that would be caused by the banning of such flights, the approach would be ineffectual in addressing the passenger cap issue and has correctly been rejected by airlines.

[ Potential freeze on private business jets at Dublin Airport would ‘greatly hinder’ foreign direct investment in Ireland ]

It is unfortunate that Dublin Airport waited until December 2023 to submit a planning application to make much-needed improvements at the airport and to increase the passenger cap to 40 million per year. The planning process for this application will inevitably take a number of years to conclude. This planning application could and should have been made in 2019, which would have avoided the current difficulties.

In Aer Lingus, our ambition is to power 10 per cent of our flights using sustainable aviation fuel by 2030, which is more ambitious than the level mandated by the European Union

DAA, the operator of Dublin Airport, has been fully aware for many years of the growth plans of airlines based at Dublin, including the investment in new, more sustainable and more fuel-efficient aircraft to enable that growth and contribute to sustainability objectives.

In the context of planned growth, the aviation industry is aware of its carbon impact and its obligations to address challenging environmental issues, and it has committed to achieve net zero by 2050. In Aer Lingus, our ambition is to power 10 per cent of our flights using sustainable aviation fuel by 2030, which is more ambitious than the level mandated by the European Union.

It is also unfortunate that the new north runway, a key infrastructure investment costing €320 million, was opened without the night-time flying restriction issue being resolved, which could reduce the overall capacity of Dublin Airport – an extraordinary outcome following such a large capital investment.

While the past cannot be undone, the current difficulties do point to the importance of Dublin Airport being managed more strategically into the future – reflecting its importance as a strategic national asset. This will demand a new approach to be led by Dublin Airport Authority but also involving inputs from other key stakeholders such as the Government, Fingal County Council, An Bord Pleanála, regulators and airlines.

In the near term, the planning uncertainties urgently need to be resolved. In relation to the passenger cap issue, the steps to resolution should include appropriate exclusion of certain categories of passengers from the calculation for planning permission purposes (such as transfer passengers who don’t use the transport infrastructure serving the airport).

In relation to the issue of restrictions on night-time flights, the key step to resolution is a timely decision by An Bord Pleanála in early 2024 to confirm the noise quota scheme.

The economic impact of failure to resolve the planning uncertainties would be stark.

Lynne Embleton is chief executive of Aer Lingus