Another report has suggested that passenger charges at Dublin Airport may need to rise to €9.50 as a result of the proposed Aer Rianta break-up, writes Emmet Oliver.

The report, by a leading corporate finance house, agrees with a finding by PricewaterhouseCoopers (PwC) that a ceiling on charges at the new Dublin Airport may need to rise from €5.29 to between €9.45 and €9.50 between now and 2008.

The increase will be needed to "deliver sustainable financial ratios", says the report. It was carried out by IBI Corporate Finance and presented to the Aer Rianta board in recent days. The report contains a review of various projections, some from Aer Rianta and some from other sources.

The PwC report suggests that an independent Dublin Airport would have to raise the cap on airport charges to meet interest payments. This is because the Minister for Transport, Mr Brennan, intends to shift the debts of Shannon and Cork onto the balance sheet of Dublin Airport.

The IBI report points out that Aer Rianta's projections indicate that Shannon Airport will eventually become self-financing after once-off "transformation costs" of about €15 million.

However, it points out that the PwC report envisages "transformation costs" of €20 million, plus additional funding of €10 million. The IBI report says that the PwC report does not take account of a potential shortfall in the Aer Rianta pension fund.

It says that financial ratios at Dublin Airport will be "significantly out of line" with international airports in 2005, particularly without the increase in airport charges. It acknowledges, however, that significant "re-balancing" is expected by 2008 if passenger charges are altered and then ratios will come into line with international trends.

The PwC report states that the most complex part of the break- up plan relates to the reserves of Aer Rianta. It points out that an "immediate" distribution of Shannon and Cork is not possible. Instead, it suggests that Cork be leased from Dublin Airport rather than completely spun off.

Meanwhile, the Dublin Chamber of Commerce has called on the Government to "clarify" its plans for Dublin Airport. It says unless there is clarity in relation to terminal facilities at Dublin Airport "tourism will suffer".

"As things stand, expansion work on terminal facilities at Dublin Airport, which was completed in March 2002, will cater for 20 million passengers per annum. However, forecast demand suggests that additional capacity will need to be operational by 2005/06," said chamber spokesman, Mr Cian Connaughton.

Earlier this week, Aer Rianta signalled that its Pier D terminal facility would shortly be abandoned because of a failure by the Government to give a formal go-ahead. The terminal was to be a quick turnaround facility, especially suited to low-cost airlines.

The company indicated that over €7 million of investment might be written-off as a result. These comments angered Ryanair, which accused Aer Rianta of "gold-plating" at the airport.