Aer Rianta will resist pressure from the Government to allow the private sector develop new facilities at Dublin airport. The board of the State airport operator will meet tomorrow to consider a Government proposal that a new area for low-cost airlines be developed by public private partnership. The report by an interdepartmental committee set up to limit the economic fall-out of the September 11th attacks also calls for lower airport charges to boost visitor numbers.
Aer Rianta received the report yesterday and has been asked to respond within a week. Senior sources at the company said it would look at lower charges but would offer them to all airlines using the airport and not just low-cost carriers such as Ryanair. It can expect support for this position from the Department of Public Enterprise which was a member of the interdepartmental committee and argued against any special treatment for Ryanair.
"We are going to offer something but are not sure what it will be. It will be aimed at increasing the numbers coming to the country," said the source.
The report calls for Aer Rianta to "develop a more aggressive drive to incentivise growth in passenger numbers through pricing and market support strategies (this would include incentivising growth from current levels on existing routes)".
The company has already introduced fresh incentives in response to the post September 11th slump in airline traffic. The scheme - which gives a holiday on airport charges on new routes for the first three years - has been dismissed as inadequate by Ryanair, the leading low-cost carrier. Airport charges are currently £7 (€8.90) per passenger.
Whatever new incentives are offered, they will fall short of the 20-year, £1 per passenger deal being sought by Ryanair, warned the Aer Rianta source. The budget airline, which has promised to fly an additional one million passengers to Ireland next year - if it gets the deal it wants - declined to comment yesterday.
The report also calls on Aer Rianta "to procure the development of Pier D by spring 2003 on the basis of the existing planning permission as a low-cost facility targeting low-cost carriers". Aer Rianta should "enter into appropriate arrangements for the management of Pier D to ensure that it facilitates significant growth in throughput at Dublin airport from low-cost operators", the report continues.
Taken together, the two recommendations are a clear signal that the Government would like to see the new facilities built and operated by the private sector. Although the recommendation does not rule out Ryanair developing Pier D, it falls well short of the budget airline's request to be allowed build its own, standalone, low-cost terminal.
The report also recommends "the allocation of existing facilities in the interim to encourage growth in traffic by low-cost carriers through appropriate capacity allocation plans at Dublin airport".
The next step, according to the report, is for "Aer Rianta to respond with an implementation plan for a strategy which takes account of these proposals".
Aer Rianta sources said yesterday that the proposed Pier D development had been intended only as an interim measure and had been shelved because it was no longer needed. They added that the scheme did not meet the tough security requirements that have been put in place at airports since September 11th.
Aer Rianta will argue that once its development plan is completed next March there will be surplus capacity at Dublin airport. The company is also expected to argue that if it designates part of the airport for low-cost carriers on offers and then lowers charges, it may find itself falling foul of EU competition law.
