Regulator directed to protect Dublin Airport viability

Minister for Transport Paschal Donohoe has stepped into the row over plans to cut Dublin Airport's passenger charges by issuing a warning that the hub must be allowed raise the cash it needs to implement Government aviation policy.

The Commission for Aviation Regulation (CAR) wants to veto €170 million of proposed spending by Dublin Airport Authority (DAA) to allow the cap on its passenger charges to be cut by 22 per cent from €10.68 to €8.35 between next year and 2019.

The DAA wants the charges, which airlines pass on to passengers, capped at €13.50, but has said that it will not increase them beyond €10.50 by more than the rate of inflation.

Mr Donohoe has used his statutory powers to direct acting commissioner John Spicer that when the regulator makes its final decision on charges it must "ensure that the Dublin Airport Authority's financial viability is protected" so it can implement Government policy.

Cap on charges

The Minister’s move obliges the regulator to take what he says into account when it finally sets the cap on the DAA’s charges at the end of this month. His letter singles out the Government’s wish that the airport should have terminal and runway facilities to promote direct flights to key markets and emerging economies.

As part of a series of measures designed to allow the charges to be cut, the CAR wants to block the airport’s plans to spend €30 million on a new runway and €38 million on boosting capacity in Dublin’s terminal one.

The regulator confirmed yesterday it had received Mr Donohoe’s letter and said that when it makes it final determination it will have regard to all submissions received as well as complying with the Minister’s directive.

Mr Donohoe's letter cites the recent draft policy published by the Government and points out that this deals with developing the airport's role as an international gateway, a secondary hub for traffic between Europe/ Asia and the US, and an access point for tourists and investors.

Sustainable operation

He states that the “sustainable operation of Dublin Airport on a commercial basis without recourse to e

xchequer funding or an equity injection by the State” is part of Government policy.

News that the Minister had issued the direction sparked an angry reaction from Ryanair's head of legal and regulatory affairs, Juliusz Komorek, who accused the Department of Transport of directing the commission to increase charges.

He demanded that the regulator be shut down, as it lacks independence.

"The department's direction, signed by Minister Paschal Donohoe, comes less than four months after the previous transport minister, Leo Varadkar, stated during a Dáil debate that his department would not issue directions to the CAR because he favoured independent regulation," he said.