daa seeks big increase in passenger fares for Dublin

Dublin airport operator daa is seeking a substantial increase in passenger fares for the facility between now and 2026.

The company has told the Aviation Regulatory Commission (CAR) that it requires a radical change in cargo, because a 15% increase would only restore the cargo position to the position it had in 2019, before the pandemic.

“With this regulatory decision, the Commission has a critical responsibility to enable the recovery of Ireland’s gateway for the rest of this decade,” Chief Executive Dalton Philips said in a presentation to CAR ahead of the charges review. .

“Current levels of airport charges cannot sustain the tide of countervailing pressures.”

“Stakeholders need to appreciate and acknowledge that the price trajectory for the remainder of this decade is in a higher range than it is today.”

The organization wants the maximum price per passenger to rise to €12.85 next year, followed by further increases each year until 2026, when it would reach €14.58.

This year the charges stand at €8.11 per passenger, but in the absence of this revision, it would rise to €9.00 next year due to inflation.

Philips said the airport’s revised capital investment requirements remain significant at €2.5bn because the target of offering annual capacity for 40 million passengers remains relevant and is supported by customers.

“But time has been lost in delivering key infrastructure improvements and Dublin Airport’s ability to finance has been severely compromised,” he said.

He said Dublin Airport is now experiencing its third year of pandemic-related business and financial damage, exacerbated by pre-pandemic price controls that are still in place and were designed for more than 35 million passengers per year.

“The pandemic has inflicted deep and lasting damage on the finances of the regulated entity,” he said.

“Despite implementing an extensive emergency mitigation programme, 66 million passengers, €900 million in revenue and more than €500 million in profit were lost during the 2020-2022 period.”

“Net debt has doubled to a record level of over €1bn and the balance sheet is now significantly affected.”

He said the airport had entered the pandemic with “unsustainably low airport charges, reduced allowable earnings, and limited financial room to withstand downside risks or external shocks.”

Referring to airport security check delays in recent months, the airport chief said recent experiences have highlighted that passengers generally expect a quick return to pre-pandemic levels of service.

“Unfortunately, it will take additional time, cost and human resources to improve standards from the current minimum levels,” he said.

“We understand that the ideal template is to offer an unrestricted and sustainable level of service at an affordable price.”

“However, providing a high-quality airport experience at an ultra-low passenger charge is an unsustainable permutation.”

He said they now face real choices on the proposal that is planned for the next five to 10 years, with difficult trade-offs required in the parallel quest for growth, efficiency, sustainability and affordability.

“Post-pandemic, the reality is that the ‘value’ proposition that consumers and airlines require cannot be delivered with the current artificially low price caps,” he added.

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