IRELAND’S AVIATION REGULATOR has told Dublin Airport to cut airport charges by over 18% in the next five years.
The ruling from the Commission for Aviation Regulation (CAR) could see air fares out of the capital come down.
In the ruling today, the CAR says that the price that the airport can charge passengers per customer will have to come down from €10.83 this year to €8.68 in 2019.
The decision says that the CAR must “protect” those who use the airport and is doing so by reducing the cap by 4.2% a year until 2019.
“Our approach to setting the price cap is one of ‘incentive regulation’ – encouraging DAA to realise efficiencies, with a view to ultimately passing the benefits on to users. DAA out-performed the targets set in the Commission’s 2009 determination and it is now time for users to enjoy the benefits of this lower cost base in the form of reduced airport charges” according to John Spicer, Acting Commissioner for Aviation Regulation.
The determination also allows for €341 million in capital investment in Dublin Airport over the next five years, an average annual spend that is 50% higher than it has been in the last four years. Crucially for the airport, there is a further allowance to build a parallel runway, should the need arise.
CAR Commissioner John Spicer said that Dublin Airport Authority (DAA) should target cost savings and efficiencies, but the CAR says the airport should still turn over nearly two billion Euro in the next five years from charges and commercial revenues.
“Our determination sets a target for DAA in 2019 that entails passing on cost savings – lower operating costs and lower financing costs – to users.
While the Commission has decided to reduce the price cap in each year up to and including 2019, we still expect DAA to raise about €1.8bn from airport charges and commercial revenues over the next five years. This is 12% more than the revenues it was able to collect in the last five years.
However, DAA says the decision is “unsustainable”, with Chief Executive Kevin Toland saying that the airport had planned to keep charges flat.
“The aviation regulator has refused to sanction more than €100 million worth of necessary improvements that would maximise the growth opportunities at Dublin Airport, upgrade the passenger experience in the older parts of the airport, and deliver the most efficient use of the airfield in a safe and secure manner.”
The Authority says it will study the 142-page report in detail.
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