Airline Code [RYR]
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Tags :UK, Ryanair
Ryanair, called (24-Apr-09) for an urgent inquiry into the DAA monopoly by the Office of the CAG (Comptroller & Auditor General), as the DAA’s latest accounts support Ryanair’s belief that the DAA monopoly is yet again “gaming” the regulatory system.
It comes as no surprise to Ryanair that the DAA is co-incidentally forecasting “losses” and traffic falls at the same time as it is seeking to double passenger charges in the current regulatory review of airport charges.
Ryanair pointed out the following:
1. The DAA’s traffic at Dublin would not be falling if the Dublin Airport monopoly had not increased passenger charges last Winter which caused Ryanair to ground 5 of its 22 Dublin based aircraft. It is the DAA which has deliberately engineered this traffic decline.
2. The DAA has continued to increase charges to the airlines (including double charging for the floor space for check-in desk kiosks), at a time when it is reducing carparking charges to compete with private sector carparks near to the airport. How can the DAA monopoly on the one hand lower its carparking charges, while at the same time increasing its passenger charges to turn away traffic from Ryanair, Aer Lingus and other airlines.
3. Ryanair again calls on the DAA to explain what it has done with the EUR800m proceeds it has received over the past two years from the sale of the Great Southern Hotels Group and its investments in Birmingham, Düsseldorf and Hamburg airports. Since these proceeds have not been used to pay down airport debts incurred by the DAA at Cork, Shannon or Dublin, the DAA must explain where this EUR800m has been squandered.
4. The DAA must explain why it is presently spending EUR1.2bn on a Taj Mahal Terminal 2 building – which includes a separate building for deep queuing check-in spaces (at a time when all airlines are moving to kiosk and web check-in) – if, as they claim, they are forecasting traffic declines and losses. Ryanair believes that the Board of the DAA may be engaged in reckless trading by committing to this spending and waste, which cannot be paid for unless passenger charges at Dublin Airport are doubled yet again.
Commenting today on the DAA’s results, Ryanair’s Michael O’Leary said:
“As usual the DAA monopoly is forecasting losses and traffic declines at the same time as it is seeking to persuade the useless Aviation Regulator to double its passenger charges. This is the sort of regulatory gaming which has been ended in the UK thanks to the Competition Commission’s decision to force the break up of the BAA airport monopoly.
“The DAA’s claims that passenger traffic is falling “in line with similar declines at airports throughout Europe” is false. Passenger traffic at Dublin is falling, solely because the DAA rejected the airlines request for lower charges last Winter. Other European airports and airlines – most notably Ryanair – are continuing to grow, and Mr Collier’s claim that airlines are “cutting capacity” is simply false. Ryanair, Dublin Airport’s largest customer, is increasing capacity, just not at Dublin where the DAA provides atrocious facilities, yet levies among the highest charges of any European airport”.
“Ryanair believes that Mr Collier and his fellow Board members at the DAA may be engaged in reckless trading. They are wasting EUR1.2bn building a white elephant T2 which its airline customers don’t want and Dublin Airport doesn’t need. A terminal of this capacity can and should have been built for some EUR200 million, less than one sixth of the money wasted by the DAA on Terminal 2. Mr Collier and his Board have set out to waste as much money as they can and then force the Regulator to allow them to increase passenger charges by the greatest amount for the next 5 years. This is regulatory gaming.
“We have been here before with the DAA monopoly. They wasted over EUR200m building a 3 million passenger capacity terminal at Cork Airport, which can and should have been built for less than EUR20m. Not content with wasting EUR1.2bn on a terminal which should have cost less than EUR200m, Mr Collier and his colleagues have knocked down the 10 year old Pier C, yet are still charging Dublin’s airlines and its passengers for the cost of this facility, which they scrapped after just 10 years. This waste is worse and greater than e-voting machines!
“The time has now come for Mr Collier to explain what he and his Board have done with the EUR800m proceeds they received in the last year from the sale of Great Southern Hotels, and their stakes in Birmingham, Dusseldorf and Hamburg airports? It is clear from the DAA’s ballooning debts, that these monies have not been used to pay down debt, so where are they?
“The DAA monopoly has been mismanaged in recent years by a Board of political hacks and a management team who continue to waste vasts sum of money on facilities which its airline customers don’t want, and which the DAA cannot pay for. Now traffic at Dublin Airport is declining because unlike other airports all over Europe, the DAA is still raising costs and charges, while other airports are lowering them.
“The Board and Management of the DAA have failed. The Comptroller & Auditor General should immediately investigate this waste and profligacy before Ireland’s traffic and tourism industry is strangled by the dead hand of the high cost, inefficient DAA monopoly and Mr Collier and his Board’s proclivity for spending hundreds of millions of euro which the DAA clearly doesn’t have and which Dublin’s tourists and citizens can’t afford”.
(c) Centre for Asia Pacific Aviation. Date posted: 27-Apr-09
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Ryanair calls for an inquiry into the DAA monopoly by the Office of the CAG 
