Monday, 12 August 2013

CAR Publishes Issues Paper on Dublin Airport Charges 2015-2019

                                                   
Courtesy: Paul Doyle 
The Commission for Aviation Regulation has published its Issues Paper on airport charges at Dublin airport for the next regulatory period from 1st January 2015 to 1st January 2019.

CAR stated “A new Determination governing airport charges at Dublin Airport is due by end 2014. This paper begins the process leading to the making of that Determination. The current price cap expires at the end of 2014.We are making a Determination that will affect what the DAA can charge at Dublin Airport for taking-off, landing and parking aircraft; the use of air bridges; arriving and departing passengers; and the transportation of cargo."

It noted In summer 2013 Aer Lingus and Ryanair are expected to account for three-quarters of air traffic movements. No other airline at Dublin Airport is expected to account for more than 4% of traffic.

The mix of airlines at Dublin Airport means that most travel is not “full service”.

The Dublin-London routes continued to be the most popular.

CAR's analysis of traffic noted the short-haul market continues to dominate accounting for 88% of passengers in 2012 Europe bound (36% to the UK and 52% to continental Europe), little changed from five years ago,

Flights to destinations outside Europe and North America increased by 85% in 2012 alone and accounted for 2.5% of all movements.

Transatlantic flights accounted for 9% of movements in 2012, up from 7% in 2008 with the addition of frequencies being added on existing routes and new routes added and added the domestic travel market has collapsed.

About 10% of flight movements are non-commercial scheduled traffic. This includes cargo flights which account for 2% of movements.

Interestingly CAR's analysis noted a disconnect between GDP and passenger numbers where more closely related up to 2009, since more variables have come into play consumer expenditure, the level of trading activity, and oil and carbon prices.

In the next regulatory period CAR stated "The sensitivity to passenger numbers is consistent with the idea that there are significant economies of scale associated with operating an airport, at least for the volumes of traffic experienced at Dublin."

In 2007, the DAA was forecasting 2012 passenger numbers more than 40% higher than has subsequently been realized.

The Regulatory Asset Base could add a further €430 million in capital costs in the unlikely event a number of 'Triggers' are meet such as extension of Terminal 2 if annual passenger numbers exceed 33 million costing €100m , the  development of the second parallel runway at cost €300m if passenger numbers in a 12-month period exceed 23.5 million and if the weekly demand for contact stands exceeds 74, the apron development trigger would add over €20m.

In December 2013 and January 2014 the DAA plans to consult with users on its Capital Investment Plan 2015-2019.

Irish Aviation Research Institute © 12th August 2013 All Rights Reserved.

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