Dublin Airport New Runway/Infrastructure.

Jamie2k9

Jamie2k9 wrote: »

Regulator propose 15% cut in airport charges, daa not reacted well. Not looked at the proposals however I think CAR view on quality service for passengers differs to mine and others.

https://www.aviationreg.ie/news/commission-publishes-draft-determination-on-dublin-airport-charges-2020-2024.898.html

https://www.dublinairport.com/latest-news/detail/daa-extremely-concerned-at-aviation-regulator's-proposed-charges

I get the impression CAR work with different calculators to everyone else to be honest. They quite often expect miracles from penny’s.

ongarboy

https://www.independent.ie/business/irish/plan-for-170m-tunnel-to-expand-airport-38077439.html

Not sure if this was discussed previously but Indo reporting new tunnel to be built at DUB

Nijmegen

Yeah that was discussed in the CAR document. I get it that DAA is always going to fight for more budget to achieve the projects in front of them, but they seem so far apart that you'd wonder if a third party assessment isn't required. I'm usually for lower charges, but you could also argue that if strong growth is occurring within the current regime do you really need to lower the price at all (as typically lower price = higher demand, which you already have).

MoeJay

Some airline customers of the DAA might suggest all you need is a big barn with a few desks, security search and a few gates on the other side, who needs a big fancy building etc...? Let the DAA raise revenue for all their other bits and pieces from sources other than the airlines, after all aren’t they bringing them the passengers in the first place?

:pac:

I imagine the CAR are lobbied extensively by the airlines, lower charges means greater proportion of the fare goes into their pockets. The infrastructure does have to be paid for, somehow,in the end. And the passenger will always be the one to pay!

IngazZagni

I imagine the optimum number might be in the middle somewhere. The needs of different airlines are very different to each other so I would always take what they say with a pinch of salt.
I was quite frustrated at the RTE news report last night which seemed to directly link the lower charges to lower air fares. That's not how it'll work in the real world. The airlines will continue to charge what they can to achieve their load factor/yield targets. It'll just mean a larger percentage of the fare will go directly to the airlines profits.

Nijmegen

IngazZagni wrote: »

I imagine the optimum number might be in the middle somewhere. The needs of different airlines are very different to each other so I would always take what they say with a pinch of salt.
I was quite frustrated at the RTE news report last night which seemed to directly link the lower charges to lower air fares. That's not how it'll work in the real world. The airlines will continue to charge what they can to achieve their load factor/yield targets. It'll just mean a larger percentage of the fare will go directly to the airlines profits.

Most of the media don't even know the difference between revenue and profits, trying to get their heads around any complexity so they can explain it to even less informed average punters is folly.

rameire

is this not beating the DAA with two sticks.
1. reduce your charges per passenger and deal with it. makes for happier airlines and then customers who believe they will get cheaper flights.
2. giving out to the DAA because the infrastructure they need to sustain a happy passenger and happy airline has not been built, due to lower passenger charges.

lawred2

surely it's better that users of the airport pay more towards its expansion than the 'taxpayer' who may never use the airport...

I'm not saying that infrastructure should not not be paid for by taxpayers but user contribution should be as large a part of possible in my mind

Blut2

I'd imagine most users of the airport would prefer to pay an extra 1 or 2euro in airport charges for the sake of having a well functioning airport. Its a minuscule difference when you're (mostly) paying hundreds of euros for flights anyway.

We don't want to go the route of the US where airports are underfunded and awful.

rivegauche

Devil's Advocate: Due to the passenger profile in Dublin a large minority or majority of the passengers walk in with their bags on their backs through the fronts doors and proceed all the way to their planes with no interaction with the staff in the airport save for a surly security person barking instructions at them. Should they be expected an additional €2 for that pleasure.

The passengers probably won't get the 2 euro benefit from their airline but that airline will most likely allocate planes(and larger planes) to Dublin that would have otherwise gone elsewhere.

rivegauche

Blut2 wrote: »

Its a minuscule difference when you're (mostly) paying hundreds of euros for flights anyway.
.

Most Aer Lingus and Ryanair passengers would not be paying hundreds for flights.
Most passengers are price sensitive. If they weren't then Norwegian wouldn't be filling their planes from Dublin.

NH2013

rivegauche wrote: »

Devil's Advocate: Due to the passenger profile in Dublin a large minority or majority of the passengers walk in with their bags on their backs through the fronts doors and proceed all the way to their planes with no interaction with the staff in the airport save for a surly security person barking instructions at them. Should they be expected an additional €2 for that pleasure.

The passengers probably won't get the 2 euro benefit from their airline but that airline will most likely allocate planes(and larger planes) to Dublin that would have otherwise gone elsewhere.

But the thing is they would see the benefit from it, even if they were just running through the airport, in that they'd have a second runway and not have to wait 30-40 minutes taxiing to the runway, they wouldn't have to wait out on the airfield for a parking spot for 30 minutes after landing as there could be more parking spots/piers built etc, etc.

The airport is in desperate need of improved and additional infrastructure, it can only be paid for through airport charges, the airport does not receive any state subsidies.

Any reduction in fees would only be absorbed into airlines bottom lines, not passed on to the passengers, and with Aer Lingus making €350m+ and Ryanair making €950m+ I don't think I'd rather that money went into Aer Lingus or Ryanair shareholder pockets over either improved infastructure, or the return of the money to the state through a dividend by the DAA.

rivegauche

DAA won't be flying me or you to one of the various destinations we want to go to. I want the airlines to be profitable.

Nijmegen

lawred2 wrote: »

surely it's better that users of the airport pay more towards its expansion than the 'taxpayer' who may never use the airport...

I'm not saying that infrastructure should not not be paid for by taxpayers but user contribution should be as large a part of possible in my mind

DAA doesn't receive a penny from the taxpayer (it's a net contributor including dividends). The issue is that a significant part of their fees are set by a regulator, but that's not taxpayer money, it's paid by airlines and, therefore, passengers.

Devil's Advocate: Due to the passenger profile in Dublin a large minority or majority of the passengers walk in with their bags on their backs through the fronts doors and proceed all the way to their planes with no interaction with the staff in the airport save for a surly security person barking instructions at them. Should they be expected an additional €2 for that pleasure.

The passengers probably won't get the 2 euro benefit from their airline but that airline will most likely allocate planes(and larger planes) to Dublin that would have otherwise gone elsewhere.

DAA make a compelling argument at the end of this document that they are at the cheaper end of the European spectrum at the existing price, let alone the reduced one CAR is suggesting. CAR is looking for DAA to go to €7.50 - that's lower than Stansted according to the info they present.

The CAR argument is that rising PAX volume combined with retail etc revenue and currently lower costs of accessing funding means they can sustain this lower price per passenger. CAR also made some determinations that DAA can cut 150m off the cost of delivering these programs (-8%) and also only increase its operating costs by 23m (+8.5%) at a time when it estimates DAA will increase pax numbers by +20%.

If I'm a DAA manager then I'm being told to increase productivity both in terms of major capital project delivery and day to day operation of the airport. The combined swing of those two things is, well, interesting to manage at the same time for any organization. "You can deliver on time, on budget or on spec. Pick two." comes to mind.

I again go back to my underlying argument, which is that you typically cut prices in order to stimulate demand. If demand is already high, why do you need to cut the price to stimulate further demand? Particularly if you have capacity constraints you're actively seeking to overcome with the money? Even if DAA were to get more money than it needed and it ploughs it into the infrastructure capacity, at a time of strong demand is that so bad?

MoeJay

rivegauche wrote: »

DAA won't be flying me or you to one of the various destinations we want to go to. I want the airlines to be profitable.

But suggesting that the average pax has no interaction with the airport other than security personnel is a one-dimensional view. It doesn’t reflect the reality.

The passenger has to use a terminal from which to fly; they may well sit on a seat at a gate; they may well even use the toilet facilities...who else provides the stand for the aircraft to park on if not the airport? (Not just a DAA situation either...)

Nijmegen

MoeJay wrote: »

But suggesting that the average pax has no interaction with the airport other than security personnel is a one-dimensional view. It doesn’t reflect the reality.

The passenger has to use a terminal from which to fly; they may well sit on a seat at a gate; they may well even use the toilet facilities...who else provides the stand for the aircraft to park on if not the airport? (Not just a DAA situation either...)

If all you do is walk in the door, go through security and board your plane and away you go I can think of a near endless lists of costs associated with enabling that to happen irrespective of whether or not you use the jacks. From maintaining the aircon to keeping the lightbulbs on to maintaining the doors you walk through in the terminal, to developing the taxiway infrastructure so that you can get from your gate to the runway on time, to the field maintenance that keeps a bird from ingesting down the engine or a pothole on the runway bringing your journey to an end, to the ground controller who keeps things flowing............. There's so many things that have to be paid for through a combination of fees levied on the different users (airlines, passengers, cargo handlers, etc). Not to mention the cost of developing the field so that its capable of being the main airport for a country that is growing in population.

MoeJay

Nijmegen, our posts overlapped...

The list is indeed endless, my effective point is that it impossible that the pax interaction is as limited as previously suggested.

lawred2

rivegauche wrote: »

Devil's Advocate: Due to the passenger profile in Dublin a large minority or majority of the passengers walk in with their bags on their backs through the fronts doors and proceed all the way to their planes with no interaction with the staff in the airport save for a surly security person barking instructions at them. Should they be expected an additional €2 for that pleasure.

The passengers probably won't get the 2 euro benefit from their airline but that airline will most likely allocate planes(and larger planes) to Dublin that would have otherwise gone elsewhere.

really?

I'd class transiting through a spacious, well lit, air conditioned terminal with travelators as a benefit... nevermind the myriad of unseen benefits and costs...

IngazZagni

rivegauche wrote: »

Devil's Advocate: Due to the passenger profile in Dublin a large minority or majority of the passengers walk in with their bags on their backs through the fronts doors and proceed all the way to their planes with no interaction with the staff in the airport save for a surly security person barking instructions at them. Should they be expected an additional €2 for that pleasure.

The passengers probably won't get the 2 euro benefit from their airline but that airline will most likely allocate planes(and larger planes) to Dublin that would have otherwise gone elsewhere.

What type of staff would you be willing to cut and how many would Dublin Airport employ?
I think you are looking at this too simply. Everything from the moment they arrive at the airport campus is part of the experience of using the airport and this has to be paid for. Efficiency costs money.

You are missing the point about the extra €2. The airline would absorb that in the form of additional profits. Both main operators at DUB are making healthy profits currently. Neither of these airlines can base additional aircraft overnight in Dublin as it is full. The new runway and additional gates will help increase capacity but this costs huge amounts of money.

I would argue that airport charges should be reduced when there is a decline in traffic to help create growth. This is not the case now.

rivegauche

IngazZagni wrote: »

The airline would absorb that in the form of additional profits. Both main operators at DUB are making healthy profits currently.

Have you been paying attention to the profit warnings from Ryanair in recent weeks or the published results from IAG just today.
These airlines will go where they can maximise profits or minimise losses.
They are not schackled to this airport.
Passengers will only fly if the flights on offer are of interest to them. Airlines will not offer routes of interest if there is no money in it for them.

IngazZagni

rivegauche wrote: »

Have you been paying attention to the profit warnings from Ryanair in recent weeks or the published results from IAG just today.
These airlines will go where they can maximise profits or minimise losses.
They are not schackled to this airport.
Passengers will only fly if the flights on offer are of interest to them. Airlines will not offer routes of interest if there is no money in it for them.

Absolutely. IAG posted a profit in the first quarter which is impressive in the airline world. I’m not sure what Ryanair’s own internal issues have to do with this and yet it continues to expand at Dublin this summer. Fuel prices are a lot higher than last year and this is putting costs up at airlines.

Dublin airport is expanding. If it was contracting I’d argue for lower costs to generate growth

The DAA as a semi state need to balance the quality of the airport, the costs of the airport and the best interests of the Country.

Nijmegen

I saw a few posters up about this and then saw the leaflet in a residents group. Solidarity pushing the noise bill during the local elections. I saw one person then posting in a panic about how huge A380s would be landing in Dublin airport once the new runway opens, and they're incredibly noisy (apparently). Fake news meets populist claptrap.

marno21

Nijmegen wrote: »

I saw a few posters up about this and then saw the leaflet in a residents group. Solidarity pushing the noise bill during the local elections. I saw one person then posting in a panic about how huge A380s would be landing in Dublin airport once the new runway opens, and they're incredibly noisy (apparently). Fake news meets populist claptrap.

All about the DAA & their profits. Typical nonsense.

Hotblack Desiato

You didn't hear that gang complaining when state-owned airlines were charging £300 return for a ticket to London on a screeching 111 or 737-200.

prunudo

Hotblack Desiato wrote: »

You didn't hear that gang complaining when state-owned airlines were charging £300 return for a ticket to London on a screeching 111 or 737-200.

Nobody could hear anything over those engines either way!

Balf

Nijmegen wrote: »

DAA doesn't receive a penny from the taxpayer (it's a net contributor including dividends). ...... If demand is already high, why do you need to cut the price to stimulate further demand? Particularly if you have capacity constraints you're actively seeking to overcome with the money?

Good point, and we should probably mention the regional view is that context. Strong element of grandstanding in those views, but also highlighting the fact that alternative capacity exists if an airline really has a problem with the higher charge.

https://www.clareecho.ie/shannon-airports-challenges-killing-tourism-in-clare/

"I was talking to someone this morning who got a flight from Dublin to London for a rugby match for €150 cheaper than they would have got it from Shannon”

https://www.limerickpost.ie/2019/05/08/mep-wants-change-in-airport-policy/

Sean Kelly described the fact that Dublin has 95 per cent of all new passengers coming to the country as “almost immoral.”

marno21

Balf wrote: »

Good point, and we should probably mention the regional view is that context. Strong element of grandstanding in those views, but also highlighting the fact that alternative capacity exists if an airline really has a problem with the higher charge.

https://www.clareecho.ie/shannon-airports-challenges-killing-tourism-in-clare/

"I was talking to someone this morning who got a flight from Dublin to London for a rugby match for €150 cheaper than they would have got it from Shannon”

https://www.limerickpost.ie/2019/05/08/mep-wants-change-in-airport-policy/

Sean Kelly described the fact that Dublin has 95 per cent of all new passengers coming to the country as “almost immoral.”

No context here. If this was a Munster match it's little surprise that Shannon was more expensive, given reduced capacity at Shannon and more demand at that time.

Jamie2k9

Regulator says daa should cut Government dividend!

https://m.independent.ie/business/irish/cut-daas-40m-state-dividend-payout-to-boost-airports-.says-aviation-regulator-38100441.html

I agree.

Nijmegen

Jamie2k9 wrote: »

Regulator says daa should cut Government dividend!

https://m.independent.ie/business/irish/cut-daas-40m-state-dividend-payout-to-boost-airports-.says-aviation-regulator-38100441.html

I agree.

Why? The state should just privatize the asset if its not going to get a dividend from it. It regulates the sector so can always ensure it'll be open for business on their terms. Nothing wrong with operating an asset and getting dividends from it.

I don't get the crusade the CAR is on here. Is it lower the price no matter what? Again, just in the context of supply side economics the demand is already high so a lower price that risks certain major projects to allow that demand to continue to be met just makes no sense. And cutting the dividend to taxpayers into the mix is just ludicrous when, again, there's plenty of demand. Cut the dividend when demand is low and you need to, for example, put in some sweeteners to entice route formation.

rivegauche

Jamie2k9 wrote: »

Regulator says daa should cut Government dividend!

https://m.independent.ie/business/irish/cut-daas-40m-state-dividend-payout-to-boost-airports-.says-aviation-regulator-38100441.html

I agree.

I agree. The objective is to support the economy and society by allowing easy, efficient and inexpensive access in and out of the country. It is not to make profit or enrich private interests.