DAA chairman blasts regulator as €1m a day lost
Dublin and Cork airports operator says pandemic crisis has already seen it lose €160m in revenue
A DECISION by the Commission for Aviation Regulation (CAR) to cut passenger charges at Dublin Airport is “simply disconnected from State policy”, according to DAA chairman Basil Geoghegan.
He insisted that the decision by CAR to cut charges at Dublin Airport, while forecasting upward-only passenger growth, benefits airline shareholders “in an unbalanced manner”.
Geoghegan made the comments in the DAA’s newly-published annual report. He did so as the operator of Dublin and Cork airports said it is losing €1m a day because of the impact of the coronavirus pandemic and has already seen €160m slashed from its revenue.
Speaking to the Irish Independent, DAA chief executive Dalton Philips claimed that the regulatory system “is broken”.
“You’ve got absolutely competing interests here with the airlines, which are incredibly short-term, and you’ve got the regulatory system which is in a very short-term position of always lowering costs and always putting pressure on capital,” he said. “It’s very much jam tomorrow for them. Some of this stuff has a five- or ten-year lead time.”
The DAA had appealed a decision by CAR to cut Dublin Airport charges between 2020 and 2024, but was unsuccessful.
This week, CAR conceded that it will have to review the assumptions it used in determining the passenger charges given the impact of the pandemic on air traffic.
The DAA said yesterday that it will record “significant losses” for 2020 and that combined passenger numbers at Dublin and Cork could slump to nine million this year, from 35.5 million in 2019.
“This is the most serious crisis that has ever faced the international aviation sector and our business,” said Mr Philips.
Passenger numbers for 2021 at Dublin and Cork may be about 21 million, which would represent a 40pc decline in traffic compared to 2019, he predicted.
“I keep saying I hope I’m proved wrong,” said Mr Philips.
He pointed out that traffic to southern Europe accounts for about 25pc of the DAA’s passenger numbers, and that the region will be slow to recover. The UK accounts for about one-third.
“Ten-million passengers a year going in and out of the country are over 50 years of age,” he added. “That is the group that is probably going to be the slowest to revert to travelling internationally.”
The DAA is currently involved in a major restructuring process to reflect the traffic slump.
“When Dublin and Cork airports last had that level of passenger numbers, they had between 750 and 1,000 fewer employees, so unfortunately we have to take unpalatable measures to lower our costs across all areas of the business,” said Mr Philips.
The DAA said its 2019 turnover rose 4pc to €935m. Earnings before interest, taxation, depreciation and amortisation were up 4pc at €302m, Pre-exceptional profits rose 13pc to just over €150m.