The operator of Dublin Airport, the DAA, is stumbling from one publicity crisis to another at the moment. At the beginning of March it was widely assailed for its "money grabbing" plan to charge people for dropping off friends and family for flights. By the end of the month it was getting wall-to-wall public and political criticism for hellish security queues because it hasn't hired enough staff.
In between DAA agreed a deal that, in the long term, may have just as much potential to cause it problems. The company's international division signed a contract to run the busiest airport in Saudi Arabia, King Abdulaziz International Airport in Jeddah, where Muslim pilgrims fly to on their way to Mecca for the hajj.
DAA launched a glossy new ESG (environmental, social and governance) corporate responsibility strategy last year. It is unclear how the new Saudi deal, DAA’s third major piece of business in one of the most politically and socially repressive states in the world, fits in with this. But the money surely is good.
Ironically, DAA probably has been saved from greater public scrutiny of its latest Saudi deal by the sheer weight of opprobrium flying in its direction over the operational disaster that has engulfed Dublin Airport’s security operation in the last month. Videos of hours-long queues snaking through the terminals have been widely shared on social media.
As travel resumes people here are far more concerned over whether they are going to make their flight than whether an Irish State-owned entity thinks it is appropriate in 2022 to run an airport in Jeddah that has separate areas for men and women.
It seems reasonable to predict that DAA’s links to Saudi Arabia may, eventually, be the cause of some trouble for the organisation. Doing business with repressive regimes carries reputational risk and it is inherently difficult to predict when that trouble might flare up. Just ask the businesses stampeding for the exit doors from Russia. Two months ago they were all counting their roubles. Now they’re in PR crisis mode as the public mood turns against them.
Security queues
But for now DAA’s biggest issue remains how to regain the trust of its passengers at home. It is under heavy fire for the security queues at Dublin Airport, for the working conditions of its security staff, and for its handling of the wholly predictable surge in passenger numbers that appears to have caught airport management by surprise this week.
Even Taoiseach Micheál Martin has been critical of DAA this week. That is never a good thing for a State entity. DAA needs to get its act together, and quickly.
Prior to the opening of Terminal 2 in 2010, the airport for years had an infamous reputation as “the Black Hole of Calcutta”, a historical reference to a notorious overcrowded prison dungeon in the Indian city. Ryanair’s Michael O’Leary was, of course, the first person to attribute the moniker to Dublin Airport during the Celtic Tiger years. But the slur stuck because anybody who passed through the airport in the frothy years before the 2008 crash could attest to what a dire experience it was.
For a decade until the pandemic Dublin Airport was transformed into one of the more pleasant flying facilities in Europe. With all of Aer Lingus and most long-haul and transatlantic services moved to the impressive Terminal 2, the original terminal became much more tolerable.
The airport coped very well with the record expansion in inbound tourist numbers to almost 10 million per year. Dublin also was well able to cope with the business traffic flowing into one of Europe’s technology and investment hubs.
Dublin Airport handled almost 33 million passengers in 2019 in relative comfort. Certainly few were going around calling it the Black Hole of Calcutta anymore.
The real reason DAA is struggling to cope with passenger demand is that it let 1,000 staff go on a voluntary severance scheme during the pandemic
But now look at it, prominent on the national news for the past week with footage of stressed passengers crying over missed flights and queues you wouldn’t wish on anybody, apart from maybe airport management.
Caught off guard
DAA has blamed Covid cases among staff, a tight labour market and new European Union background security check rules that have delayed the hiring of staff. Its chief executive, Dalton Philips, also suggested it had been caught off guard by passenger demand that is "much higher than we or other industry analysts had expected". He said its own forecasts were out by 30 per cent.
All that tells us is that DAA’s forecasting is as dubious as its management of security queues. There was ample evidence across the aviation sector from January that the rebound in traffic this year would be very strong.
Ryanair and Aer Lingus, DAA's two biggest customers, have been talking since last year about the elevated levels of pent-up demand for travel. Ryanair's O'Leary has said he hasn't seen such a growth opportunity in "20 or 30 years".
Airline shares soared earlier this year as the relatively benign economic impact of the Omicron variant of coronavirus became apparent. Irish aircraft lessor Avolon, one of the largest in the world, announced in January that it expected 2022 to be a very strong year, with a return of at least 70 per cent of traffic.
If DAA didn’t see this level of demand coming it must not have been looking properly.
The real reason DAA is struggling to cope with passenger demand is that it let 1,000 staff go on a voluntary severance scheme during the pandemic. It is understandable that it wanted to manage its cost base conservatively during a period of uncertainty. But it turns out that being so risk-averse was actually the biggest gamble of all, and it has blown up in DAA’s face.
It now has only 600 security staff when it needs 900. Compounding this, DAA is now trying to rehire security staff on yellow-pack contracts – entry-level wages that are comparable to supermarket workers, with contracts that guarantee only 20 hours per week but require staff to be available for full-time work.
Out of nothing DAA has cooked up an industrial relations problem for itself. The Taoiseach this week admonished DAA for not being “worker friendly” enough. Trade unions now have the imprimatur to file additional pay claims. DAA, now having more paying customers than it says it expected, is in a weak position to resist. It has only itself to blame.
The prompt and efficient restoration of aviation traffic is essential to the social and economic recovery of Ireland after the pandemic. The proper functioning of Dublin Airport, as the main gateway to the island, is a central element of this.
DAA needs to get a grip on what is happening before the summer rush or its public and political difficulties could spiral out of its control.