Irish aviation regulator Cathal Guiomard on Thursday signalled he will approve a 13 per cent increase in passenger charges at Dublin airport in 2010, with further rises in later years when the Terminal 2 (T2) facility opens. At a time when inflation is the lowest since 1933, as was reported last week, the response from the State monopoly to falling passenger numbers, is to increase passenger charge rates.

In a draft determination for the period 2010 to 2014, Guiomard said the passenger charge would rise from €7.39 this year to €8.35 in 2010.

He said this rise was required as there were fewer passengers travelling through the airport due to the recession. The regulator said that the charge is “perhaps 18 per cent higher,” than it would have been if the 2007 passenger forecasts for this period had remained valid.

Traffic at Dublin airport is expected to decline to about 20 million this year from 23.5 million in 2008.

The fee will rise further when T2 opens to enable the Dublin Airport Authority (DAA) to recover costs associated with its construction and operation.

The new terminal project was sanctioned close to the end of the boom as the default Irish government mode was in place. It simply ended up making a decision only because the overcrowded airport had become an international embarrassment. 

“The operating costs of T2 are currently unknown but the commission has said it will allow the operating costs of T2 revealed by a competitive tender to be ‘passed through’ to the price cap,” Guiomard said.

This tender is expected to be issued by the Government in the next two to three weeks.

Aer Lingus expressed its “deep disappointment” at the proposed increase, and said it was a “short-term decision that will again hurt Irish business.”

Ryanair said there is no justification during a recession for further cost increases at a Government owned airport monopoly, or for these being sanctioned by a Government appointed regulator. At a time when airports all over Europe are lowering charges, "this regulator is hopelessly out of touch with economic reality. These further cost increases, when added to the Government’s suicidal €10 tourist tax, means that further traffic and tourism declines in Ireland are inevitable."

Ryanair’s Stephen McNamara said: “The sanctioning of further cost increases at the high cost Dublin Airport monopoly proves that Ireland’s Aviation Regulator is useless. In recent weeks the Greek Government has reduced regional airport charges to zero, and the Spanish Government is rebating airport charges in the latter half of 2009 by 100% for those airlines like Ryanair, delivering growth. Airports all over the UK and Continental Europe are lowering their charges to reflect declining traffic and the recession. Only in Ireland is the Government owned airport increasing charges, sanctioned by a useless Government appointed regulator, at a time when the Government should be trying to stimulate, not strangle, tourism.

“Is it any wonder that traffic at Dublin Airport has collapsed by 11% in the first five months of this year. Today’s proposed increases show that Ireland’s Aviation Regulator is useless. In the UK, the Competition Commission has called for the break up of the BAA airport monopoly, having recognised that Regulation has failed to protect the consumer interest. In Ireland, this useless Regulator has repeatedly failed to protect consumers, and today’s cost increase is just the latest evidence of this abysmal failure.”