The Dublin Airport Authority (DAA) is struggling financially in the face of an expected 11% decrease in passenger numbers during 2009 through Dublin, Cork and Shannon Airports. It has forecasted an earnings shortfall in the region of €60-70 million with the recession being named as the cause. Minimal traffic growth is expected up to 2011 and the company is expected to post losses for both 2009 and 2010. The economic slump has seen the first decline in passenger numbers at the three airports since the Gulf War in 1991.
“This is the deepest recession since the 1930s and it is having a huge impact on the aviation sector.” – Declan Collier, DAA Chief Executive
The DAA has asked for a minimum €3 increase in passenger charges for 2010 until 2015 to cover the costs of their capital investment. With passenger taxes already raised in the Budget, one must wonder how much additional expense can be placed on travellers before it starts negatively effecting numbers. Passenger charges are currently €7.50 per passenger and a final decision on the proposed increase will be made in October by the Commission for Aviation Regulation. Michael O’Leary stated that an increase in passenger costs would likely see Ryanair cut services at Dublin Airport.
In the mean time the DAA has informed trade unions that it will be seeking voluntary redundancies at the three airports in an attempt to save €20 million. These savings are in conjunction with changes already implemented that have resulted in the saving of €15 million.
”That the Commission for Aviation Regulation grant it a substantial increase in passenger charges as the company seeks to pay for a €1.2 billion capital investment in its facilities at Dublin Airport.” – Declan Collier, DAA Chief Executive
Current Runway at Dublin Airport by Tolka Rovers
The DAA has halved its capital investment program at Dublin Airport to €400 million for the period 2010 until 2014 and among the projects being shelved is the second runway at Dublin Airport. The DAA said it has had to introduce a number of cost-cutting measures because of a significant drop in profits and passenger numbers last year. The runway which was due to commence operation in 2014 could be deferred until 2018.
“We now feel the airport will not experience significant capacity constraints on the runway system for a number of years, thereby pushing back its commencement date” – Declan Collier, DAA Chief Executive
Significant capacity constraints is a vague, but one would of hoped there there would be no capacity constraints on Ireland’s main airport. There are no plans to extend the current runway to accommodate long haul flights to the Far East in light of this decision. The new runway would of opened up new markets to Dublin Airport and Ireland which would of been warmely welcomed by the struggling hotel industry in Ireland.
Aer Lingus who will be the anchor tenant at the new terminal have several A350s (long rang medium width aircraft) on order which would be capable of flying directly from Dublin to destinations such as Hong Kong, Singapore, Bangkok and Cape Town. If the facilities are not provided by the DAA, Aer Lingus may have to look at basing its long haul fleet in the UK.
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