New airline committee to ensure development of Dublin Airport

Ireland’s four leading airlines have formed a new consultation committee in response to the Dublin Airport Authority’s (DAA’s) failure in the past to properly consult with users or to meet their reasonable requirements in terms of facilities at Dublin Airport.

The Dublin Airport Capex Consultation Committee (DACC) comprises representatives from Aer Arann, Aer Lingus, CityJet and Ryanair. This Committee has now been joined by several other airlines and handlers operating at Dublin Airport.

Mr Geoffrey O’Byrne White, Chairman, said that the Committee was concerned that the current airline regulatory regime was fundamentally flawed and did not allow for the full and proper consideration, by the Dublin Airport Authority, of the reasonable requirements of users, but instead fostered the development of inefficient and excessively expensive facilities. This is due to the fact that the DAA receives a rate of return on its capital expenditure and therefore the higher the expense, the higher the return.

“The perversity of this system has been recognised by the UK authorities including OFT and DfT. The UK Competition Commission is currently investigating the failure of the current regulatory regime to replicate competition in the London Airports market.

“In its interim report, the Commission criticised the BAA airport monopoly in London and also the regulator for its “light touch” approach to regulating the monopoly. The Commission is also considering a break up of the BAA monopoly, as well as the introduction of competition within airports. The Irish regulatory system is a mirror image of the UK approach.”

The DACC invited the DAA and the Commission for Aviation Regulation (CAR) to attend an initial meeting in Dublin, today (Friday, 2nd May 2008) to outline their reasonable requirements and to ensure that these are reflected in the airport’s capital expenditure (Capex) proposals.

The DAA stated that it could not attend the meeting due to unspecified “diary commitments” and the Committee postponed this part of the meeting until 7th May. However, the CAR attended the meeting and the Committee expressed its concerns over its “light touch” approach to regulating the DAA monopoly.

The Committee called on the CAR to exclude all expenditure by the DAA that does not reflect their reasonable requirements and also called for competition to be introduced at Dublin Airport in order to force the DAA to provide better services and lower its charges to passengers.