Airlines caught in a crosswind on costs

Airlines found themselves under attack on two fronts this week.

Airlines found themselves under attack on two fronts this week.

The arrival of British Office of Fair Trading director general John Bridgeman on these shores to bring the Competition Authority and the Office of Consumer Affairs up to speed on his challenge to International Air Transport Association (IATA) over ticketing policies will have sent a chill through the industry.

A day later, airlines were loudly protesting plans by Aer Rianta to substantially raise landing charges in the wake of the end of the duty-free era.

Consumer groups will be watching closely the course of Mr Bridgeman's challenge to IATA, which claims that a large number of its clauses on airline ticketing are outside European regulations.

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Specifically, he is questioning the refusal of airlines to allow passengers transfer tickets to other people when they are unable to use them themselves, the lack of compensation for rescheduled flights and restrictions on compensation for lost or damaged baggage.

However, any gains as a result of this challenge are liable to be more than offset by ticket price rises which seem inevitable if Aer Rianta goes ahead with plans to raise landing charges.

Aer Rianta and the airlines are at odds over precisely how much the rises will impact on the passenger, but both agree there will be some effect.

Claims by IATA on behalf of the airlines that in a competitive market, they can ill afford extra costs don't quite make sense as it appears all the airlines using the airport will be equally affected by the changes.

While IATA is pushing for a deferral on any rises until next year, it can hold out little hope of success in a climate where the Government is to decide as early as next month whether to float Aer Rianta. It will hardly want to take any greater a profit hit from the end of duty-free than necessary in that situation.