Dublin Airport needs more competition, say consultants

The State should consider introducing competition between the two terminals at Dublin Airport, or building a new airport to compete with the existing

one, according to a report into airport charges commissioned by the Government.

The Department of Transport last night published the report by Indecon economic consultants, which recommends sweeping changes to the system for regulating airport charges that is currently overseen by the Commission for Aviation Regulation (CAR).

Indecon makes 18 recommendations to the overall airport charges system and express concern about several areas, especially the system for appealing against charge increases.

The report says Dublin Airport has "significant market power" and should continue to have its charging regime tightly regulated. Indecon recommends "periodic" studies of the power wielded by the airport, to be conducted by a body such as the Competition and Consumer Protection Commission.

It also recommends that the Minister for Transport’s power to make directions to the commission be “restricted”. It says “one area of concern” is intervention by the minister on setting charges for “specific capital investment decisions without adequate analysis”.

Indecon recommends there should be more consultation with airlines before charges are raised. It suggests setting up a “consultative group with an independent chair” that would facilitate talks before any regulatory decisions on charges.

Under the current system, if a decision by the regulator is appealed by an airline, the minister can appoint the members of the ad hoc appeals panel. Indecon says this system “does not have credibility”.

“Major defects”

“Ministerial involvement in the appointment of members is not best practice and we believe there are major defects in the inability of an appeals panel to alter any regulatory determinations. We therefore recommend that the existing appeals process should be abolished,” say Indecon.

Instead, an independent appeals panel should be established, with the members agreed between the commission, the airlines and airports.

Failing this, the members should be appointed by "the president of the High Court or the president of the Chartered Institute of Accountants in Ireland". Consideration should be given to merging the commission into another regulator, such as Comreg, the communications regulator, or the Irish Aviation Authority.

Alternatively, some of its functions could be taken back into Government hands.

The Government last night launched an industry consultation based on the report, closing on July 29th. It asks airlines, the regulator and other industry stakeholders to comment on the suggestion that competition at Dublin Airport be fostered through competing terminals or a new airport in another part of Dublin.

Dublin Airport Authority said last night it had "taken note" of the contents of the report but would not comment further. It planned to make a submission as part of the consultation.