Aer Rianta has been told by the Government to offer more generous incentives to Ryanair and other carriers bringing tourists to Ireland. An inter-departmental working group set up in the aftermath of the September 11th attacks on New York and Washington has recommended lower landing fees at Dublin and other airports in its interim report, which was finalised last Friday.
The report will be forwarded to Aer Rianta today. The State-owned airport company has already introduced one incentive package in response to the downturn in both business and leisure travel since September. Airlines no longer have to pay any landing charges for the first three years of a new route. However, the reductions have been dismissed as inadequate by Ryanair, the leading low-cost carrier, which is seeking longer-term deals similar to those it has got elsewhere in Europe.
In return, the airline has offered to operate five new routes from Dublin which would bring an additional one million tourists to the State next year and create jobs. This would offset an expected fall of 750,000 in the number of US visitors next year. The new routes would be to Italy, France, Germany and Scandinavia.
Although the interim report's recommendation would appear to open the door to the sort of discounts being sought by Ryanair, it is unlikely to be fully welcomed by the airline. The committee has said that the lower landing fees should be available to any airline which can demonstrate that it will bring additional tourists to Ireland. This will be of interest to other low-cost carriers such as Go, which already operates out of Dublin.
BMI British Midland has also indicated that it may go down the low-cost route in response to the current crisis. It is understood that Aer Lingus is also once again considering establishing a low-cost arm, once it has overcome its current difficulties.
Ryanair - which has lobbied the Taoiseach, the Government and the committee intensively in recent weeks - is unlikely to be fully satisfied either with the committee's recommendations on expansion at Dublin Airport. The committee is of the view that a proposed wing at the airport for low-cost operators should be built in partnership with the private sector.
Ryanair has argued that it should be allowed build its own £13 million (€16.5 million) terminal, with docking facilities for 12 planes. Aer Rianta maintains that its current facilities are more than adequate, and that it should itself develop any additional facilities.
The committee decision to go down the public private partnership route represents a victory of sorts for the Minister for Public Enterprise, Ms O'Rourke. She has maintained that the State could not favour Ryanair over other airlines by giving it land on which to build a terminal without running into legal problems. Other Cabinet members had been in favour of giving Ryanair the go-ahead in order to secure more new routes and additional traffic.
The partner for the new terminal will be chosen by way of public tender and Ryanair will have to compete with other parties. Businessman Mr Ulick McEvaddy has sought to build a terminal at Dublin Airport for several years. The terminal area would offer a more basic level of service than the existing operations, which would allow airport charges to be reduced from their current level of £7 per passenger.
The inter-departmental committee is chaired by the Department of the Taoiseach. It is made up of representatives of Ms O'Rourke's Department as well as officials from Enterprise and Employment, and Tourism. Aer Rianta is expected to comply with the recommendations, but will also take shelter behind the 1998 legislation which requires it to always act in a way that ensures it remains commercially viable.
