The Aviation Appeals Panel has found against the aviation regulator's decision to limit the spending Aer Rianta can fund out of airport charges. The panel, chaired by Mr Rory Brady SC, has concluded that the regulator had not shown sufficient grounds for the cap on capital expenditure, which he introduced last August.
The introduction of the cap was appealed to the panel by Aer Rianta and the body concluded its work last week.
Copies of the findings have been sent to the interested parties and the panel's conclusion on capital expenditure will be welcome news for Aer Rianta's management. But it is not clear what legal authority the findings will have or if Mr Bill Prasifka, the Commissioner for Aviation Regulation, will be obliged to change his directive on maximum charges.
His current position is that almost three quarters of the comp- any's €1.3 billion (£1.02 billion) investment plan is not justified - in terms of making the airport more cost-effective - and thus could not be recovered from landing charges.
The panel avoided giving an opinion on whether Aer Rianta should build a new low-cost terminal, the so-called Pier D, but despite this, its findings will become embroiled in the ongoing dispute about a low-cost terminal at Dublin Airport.
The extent to which the Cabinet has become polarised on the issue has become apparent with the release under the Freedom of Information Act of a letter from the Minister for Public Enterprise, Ms O'Rourke, to the Taoiseach, Mr Ahern.
In the letter, written on November 6th, the Minister - who is responsible for Aer Rianta - makes it clear that although she was not opposed to a low-cost terminal in principle, she will not support special treatment being given to Ryanair at the expense of Aer Rianta. Mr Michael O'Leary, the chief executive of Ryanair, has lobbied intensively for Ryanair to be allowed build its own terminal, and he is believed to have won the support of some Cabinet members.
The proposal has also been supported by a Government committee set up to examine ways of boosting air traffic and tourism in the wake of the September 11th attacks on the US. The committee has hired consultants as advisers, and their report is due by the end of the month.
Ms O'Rourke told the Taoiseach that while she supported the work of the committee, "there are some basic considerations that I think should be borne in mind. These are also the basic principles, which underpin the statutory regime of the aviation regulator."
She reminded Mr Ahern that Aer Rianta had offered a four-year landing charges holiday for all airlines operating new routes from Shannon and Cork, and a three- year holiday in regard to Dublin. "In making this move, however, Aer Rianta had to satisfy itself that it was consistent with the company's statutory commercial mandate." In a clear reference to the Ryanair proposal, she adds: "I would be opposed to any suggestion, for example, that Aer Rianta's operations should be subsidised by the Exchequer in order to finance an uneconomic charging regime to stimulate Irish tourism. I know that you have not made any such suggestion yourself."
Aer Rianta also has the backing of SIPTU, the largest union at Dublin airport. SIPTU national secretary Mr Noel Dowling said the Government "must face down Ryanair. Leaving aside the question about a private businessman dictating policy to an elected Government, the argument for a new Pier D is not grounded in any rigorous economic analysis.
"The estimated cost of building the terminal would be between £12 million and £15 million. Aer Rianta routinely spends around £100 million a year developing the airport. If it was only able to levy landing charges of £1 per Ryanair passenger, Ryanair stands to save at least £10 million a year, while Aer Rianta would have to levy extra charges on other airport users to break even."
