SIPTU, IRELAND’S largest trade union, has urged the aviation regulator to increase passenger charges at Dublin airport by 42 per cent to €10.50 to “ensure” the facility “can achieve the highest levels of all standards”.
This would be more than three times the level of increase proposed on June 18th by the Commissioner for Aviation Regulation, Cathal Guiomard, when he made his draft determination.
Mr Guiomard is proposing to allow the Dublin Airport Authority (DAA) to increase its average passenger charge from €7.39 this year to €8.35 in 2010 – a rise of 13 per cent. The fee will rise further when Terminal 2 (T2) opens to allow the DAA to recoup its costs.
Siptu, one of 21 respondents to the aviation regulator’s draft determination, says it does not believe its proposed increase “would act as a disincentive to any member of the travelling public”.
By contrast, Ryanair, Aer Lingus and BMI were critical of the regulator’s analysis and his proposal to allow the DAA to increase passenger charges.
The DAA, which has sought a higher increase, described the regulator’s determination as “flawed” and said it was “highly likely” to result in its credit rating being downgraded “into the BBB range”.
The DAA said it would result in a “significant deterioration” of its finances with the result that it “could not generate the sustainable profits necessary” to meet its investment and debt costs.
Ryanair said the regulator was “rewarding” the DAA for failing to achieve its traffic forecasts. “The DAA has repeatedly rejected offers from Ryanair of substantial traffic growth in return for lower or discounted fees,” said Ryanair chief executive Michael O’Leary.
Aer Lingus said the increase in the charge next year was “neither appropriate nor necessary”.
“In a competitive market it is to be expected that prices fall rather than rise during times of weak demand,” Aer Lingus said.
It was also critical of proposals to allow the DAA to recoup the cost of T2, which Aer Lingus described as “oversized”.
British airline BMI said “there was a limit to what the travelling public was prepared to pay” and called for the opening of T2 to be deferred. “The proposal to increase the cap will feed the passenger decline we all want arrested,” BMI added.
The Irish Hotels Federation (IHF) said it was “disappointed” with the regulator’s decision at a time when the economy was in recession and hotel accommodation prices had declined by 13.7 per cent in the year to June.
The IHF said the regulator should “do all in its power to avoid this increase” and “at least” hold the charges at this year’s level for 2010 and 2011.
The International Air Transport Association said the regulator’s proposal was “unreasonable” and “unacceptable” given the “current industry crisis”.
The regulator’s draft determination was broadly supported by Ibec, Chambers Ireland, the Dublin Chamber of Commerce and the Irish Tourist Industry Confederation. Mr Guiomard’s final determination will be issued by the end of October.
