Sir, – Fintan O’Toole joins a growing chorus of commentators and politicians who lay the blame for the chaos at Dublin Airport with its management (“Idiocy of managerialism hits Dublin Airport” Opinion, June 7th).
However, there are other critical factors that have been completely forgotten in the chorus of blame. The Dublin Airport Authority (DAA) is regulated by the Commission for Aviation Regulation (CAR).
The DAA derives approximately 50 per cent of its revenues from airport passenger charges which are set by the CAR every five years. In 2015, the CAR set the price cap which the DAA could charge at €10.30 per passenger, but for 2020 the price cap was reduced to €7.30, a reduction of a full 37 per cent.
The other 50 per cent of DAA revenues come from “commercial” activities, so little wonder that the airport might appear like a “glorified department store”.
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Further, and despite protestations from the DAA, the CAR insisted that the DAA carry a high debt to equity ratio of about 50 per cent. The result was that when the pandemic hit, the DAA had a high debt level, no rainy-day fund, and little headroom to do anything other than make drastic cuts to its workforce. So, why are policymakers surprised by the logical outcome of the policies they set? But, lest too much of the blame fall on the CAR, it too was guided by legislation and government policy.
The Department of Transport policy document issued in 2017 stipulated that: “The Regulator shall no longer be mandated to have specific regard to the financial sustainability /viability of the regulated entity in making a \[price\] determination.”
And that, I contend, is a pretty extraordinary policy statement to issue from any government department about any regulated entity. So much for the talk of a “national strategic asset” that we heard at the transport committee hearing last week.
So, while the DAA board and management must accept some blame for the chaos, regrettably the Irish media has failed in its job keeping the public fully informed on this issue.
– Yours, etc,
JOSEPH RYAN,
Ardnacrusha, Co Clare.