Airlines based at Dublin Airport could be facing a rise of 50 per cent or more in airport charges if the break-up of Aer Rianta goes ahead, a confidential report seen by The Irish Times reveals.
The current per-passenger charge of €5 will need to rise by at least €2.50 and possibly up to €4 because of the break-up, warns the report from PricewaterhouseCoopers (PWC). Increases in airport charges are normally passed on to passengers by airlines.
The report is likely to increase pressure from trade unions and the Opposition on the Minister for Transport, Mr Brennan, to modify or abandon his plans to break up the company.
It was commissioned by a working group which included Aer Rianta, the Department of Transport and company trade unions.
SIPTU, in a statement yesterday announcing that it was going back into pay talks as part of the national agreement, said it had received reassurances that workers' interests in relation to charges in the aviation sector would be honoured.
The Government had earlier committed itself to full consultation in restructuring Aer Rianta and SIPTU, the main unions in Aer Rianta, and indicated that recent talks with Mr Dermot McCarthy, secretary general in the Taoiseach's Department, had reaffirmed this.
However, it remains to be seen whether the unions will be satisfied with the level of consultation in advance of the publication of legislation on the break-up.
Sources believe the issue could still prove highly contentious, particularly if Mr Brennan pushes ahead with the publication of legislation before what the unions consider adequate consultation.
The report warns that Dublin Airport may need to sell off "ancillary assets" in future to meet its debts. This is because the debts of Cork and Shannon Airports would be transferred to Dublin.
The report states that breaking Aer Rianta into three separate airport authorities - Dublin, Cork and Shannon - will involve rebalancing funding between the airports, but it warns that this comes at a cost.
"Given the present financial position, it is estimated that increases in charges in the range of €2.50 per passenger to €4 per passenger, alongside further efficiency improvements, would be required to rebalance the funding ratios."
It says such increases would be needed for other purposes "to enable Dublin Airport authority to meet its capital expenditure requirements to fund capacity growth, service its debt levels and operate to a commercial mandate". The current airport charges at Dublin Airport are capped by the Commission for Aviation Regulation (CAR).
The report acknowledges that any changes would be subject to the determination of this body.
The report points out that Aer Rianta itself is already facing "financial strain" due to an ambitious expansion programme at Cork, proposals for a terminal known as Pier D at Dublin and high debt levels compared with income.
The report outlines six scenarios for the future of Shannon Airport. One of these, based on figures previously produced by the international ratings agency, Standards & Poor, is extremely pessimistic. It suggests Shannon Airport will have debts of €125 million by the end of 2008 which would be "clearly unsustainable".
The authors suggest a new low-cost model for Shannon where the airport takes advantage of a new "open skies" policy likely to be in place by 2007-2008.
But it warns that a start-up investment of at least €20 million will be needed to get the airport up and running as an independent entity and that another €10 million could be required to protect against "external shocks".
The Department of Transport declined to comment on the report. The board of Aer Rianta held a special meeting yesterday to consider it.
The company issues its annual results next week, and the Minister's plans are likely to be addressed by its chairman, Mr Noel Hanlon.