Aer Rianta expects that over 900,000 passengers will have passed through its three airports before the holiday season concludes, with the vast majority of them (766,000) passing through Dublin Airport. It is a credit to the company that such a huge bulge of traffic is being handled with the minimum of delay and frustration. However, strains have been evident for some time and Dublin Airport, in particular, is saddled with capacity limitations which restrict its efficiency, even in the off-peak periods. The time is right for a radical solution.
Aer Rianta needs to spend some £250 million on Dublin Airport over the next three years. Next June will see the completion of a new terminal which will allow the airport to handle up to 20 million passengers a year. But at the present rate of growth, the airport will be faced with passenger traffic of 20 million in little over three years time. Considerable construction - including another runway - would seem to be unavoidable but the stark reality is that Dublin Airport alone will not be able to cope with the long-term growth projections. The case for a second airport for Dublin is compelling.
Aer Rianta is facing heavy capital expenditure elsewhere. The company has committed itself to spending £80 million at Shannon over the next six years and Cork badly needs facility improvement. Aer Rianta has to be responsive to charges that it concentrates too much on Dublin - which still handles nearly four times the traffic of Shannon and Cork combined. But Aer Rianta's capital needs cannot be met in total by the profit it earns and the company has urged the Government to move swiftly towards privatisation. However, the board of Aer Rianta wants to retain ownership of all three airports. The prospect then is for a State-owned monopoly - which is bad enough - turning into a privately-owned one.
Clearly the Government cannot countenance the complete privatisation of Aer Rianta in the foreseeable future. At most, the Government might offer to sell off one-third of the company's equity but investors might not be interested in a company which cannot be a takeover target by virtue of having a controlling shareholder which will not sell. The Eircom share price would be a lot lower today if a takeover was not a distinct possibility.
While Aer Rianta is keen to advance its privatisation, the Government needs to be cautious. The public interest and fair competition must take precedence. In the meantime, the Government should dally no longer on the issue of Dublin's second airport. Baldonnel has the advantage of being suitably located and it could house much more than a terminal for executive jets as has been proposed. But the running of a commercial airport at Baldonnel will have to be put out to tender and the need for competition between airports must be paramount.