Ryanair Calls For Closure of Aviation Regulator's Office

Ryanair today (19th Nov) called for the Irish Aviation Regulator’s Office to be closed, because it now serves no useful purpose, having had its statutory independence removed twice over the last two years by the corrupt (in the sense of being rotten and unfit for purpose) Dept of Transport which first directed the (supposedly independent) Regulator to allow the DAA to build the €1.3bn white elephant Terminal 2, and on 27th October last – at a time of collapsing traffic in Ireland – again ordered the Regulator to increase Dublin Airport charges by as much as 40% to pay for Terminal 2. Ryanair described these directions as further evidence that the Dept of Transport is corruptly aiding and protecting the DAA monopoly at the expense of consumers and Irish tourism.

Ryanair believes there is no point in having a statutory independent Aviation Regulator, when the Dept of Transport repeatedly overrules him (and the reasonable needs of users). Now that the bill for the DAA’s T2 has exploded from €170m to over €1.3bn – a seven fold cost increase – the Dept of Transport simply overrides the consumer interest again by corruptly ordering the Aviation Regulator to approve 40% increases in Dublin Airport’s charges which Aer Lingus, British Midland and Ryanair have confirmed is one of the most expensive airports in Europe.

Irish airport traffic and tourism in 2009 is suffering record collapses in the face of the DAA’s high costs, and the Government’s stupid €10 tourist tax. Traffic at Dublin Airport in 2009 will decline by over 15%, a loss of almost 4 million passengers and up to 4,000 jobs. This collapse is entirely due to the tourist tax, the DAA’s high costs and the corrupt monopoly protection policies of the Dept of Transport (the downtown office of the DAA).

This rotten policy of the Dept of Transport has, in recent years, repeatedly damaged competition and the consumer interest as follows:

1. In 2002 the Agreed Programme for Government promised consumers a competing second terminal at Dublin Airport. 13 different groups offered to build and run this competing terminal at no cost to the Government or tax payer.

2. In 2005 the Department of Transport awarded the DAA monopoly the T2 contract. At the time Minister Martin Cullen promised a “triple safeguard to ensure maximum efficiency and cost effectiveness of T2”. These safeguards would include (1) Consultation (with users on the design of facilities), (2) Verification (of T2 design and costs by aviation experts), and (3) Regulation (by the statutory independent Aviation Regulator) “to ensure that charges reflect costs appropriate to building an efficient terminal”. These safeguards proved to be as useless as Minister Cullen’s e-voting machines. Firstly the DAA didn’t consult, they just ignored the views of airline users in designing T2. Secondly there has been no cost verification by aviation experts, which is why the cost of T2 has exploded seven fold from €170m in 2005 to €1.3bn in 2009. Thirdly instead of “independent regulation to ensure charges that reflect costs appropriate to building an efficient terminal”, the Dept of Transport has corruptly ordered the Aviation Regulator to increase Dublin charges by 40% and let consumers pay for the DAA’s white elephant T2 which airlines neither want nor need.

3. During this period the DAA monopoly announced in 2005 that T2 would cost €170m. This increased to over €700m in 2006, and in 2009 the DAA confirmed that the development would cost €1.3bn, more than seven times the original figure. The DAA has wasted over €1.3bn on Dublin’s T2 when Gatwick Airport, with over 36m passengers was recently sold for just £1.5bn.

The scale of this waste and the cost of the Dept of Transport’s corrupt protection of the DAA monopoly can best be understood when compared with Ryanair’s original offer to build and pay for a competing Terminal 2 at Dublin Airport at cost of just €200m. At the time, Transport Minister, Seamus Brennan confirmed “The taxpayer gets this for free, so we would be mad not to do it”. Ryanair believes that Minister Brennan misjudged both the sanity and the corruption of the monopoly protection policy of the Dept of Transport.

Speaking today, Ryanair’s Chief Executive, Michael O’Leary said:

“Last week’s direction by the Dept of Transport to order the Aviation Regulator to jack up passenger prices at Dublin Airport by 40% in 2010 shows yet again that the Dept of Transport is the corrupt downtown office of the DAA, which continues to protect this inefficient, wasteful, Government monopoly even at the expense of passengers, consumers, Irish tourism and jobs.

“This latest direction by the Dept of Transport, which totally ends the statutory independence of the Aviation Regulator, proves that there is no independent aviation regulation in Ireland and so Ryanair believes that this €5m quango should be closed forthwith, since it serves no useful purpose.

“The fact that the DOT, during a year when traffic at Dublin Airport has collapsed by more than 15%, would disregard Irish consumers/visitors by ordering the Regulator to further jack up prices at Dublin Airport next year (on top of the €10 tourist tax) to pay for the DAA’s mismanagement in developing the €1.3bn white elephant T2, proves that the Dept of Transport cannot be trusted to protect consumers or competition, but prefers instead to corruptly protect the semi-state DAA monopoly.

“Ireland is returning to the bad old days of the mid 1980’s, when the Dept of Transport was protecting Aer Lingus by proposing legislation to jail travel agents who offered to sell discounted air tickets on Aer Lingus’ services. The Dept of Transport is unfit for purpose. It has presided over the building of a white elephant second terminal in Cork for €200m and is now repeating this failure by protecting the DAA’s building of a €1.3bn white elephant T2 at Dublin Airport. The existing terminal (with the new Pier D) now has capacity for 30 million passengers p.a. This year Dublin Airport’s traffic will fall to just 20 million. In 2010 it will fall to less than 18m passengers, while the DAA opens a €1.3bn new terminal that the airlines neither want, nor need.

“Ryanair again calls for:

1. The mothballing of the unneeded white elephant T2. Better still why not open it up as a shopping centre or a conference venue, where it might serve some useful purpose, rather than an airport terminal which is patently not needed at Dublin Airport?

2. The early closure of the office of the Aviation Regulator since clearly it has no statutory independence and serves no useful function other than to rubber-stamp the Dept of Transport ordered price increases.

3. The urgent closure of the rotten and corrupt Dept of Transport, replacing it instead with private sector competition to the inefficient, high cost, semi-state monopolies which have for far too long been protected and defended by the policy failures of this corrupt and unfit for purpose bureaucracy.

“In the UK, the Competition Commission has recently proven that an airport monopoly regulated by an ineffectual civil servant quango has failed to protect competition and has failed to protect consumers. It has required the BAA monopoly to be broken up with the sale of Gatwick and Stansted airports. Ireland needs a similar solution. It is time to close the useless €5m office of the Aviation Regulator and break up the DAA monopoly. Shannon and Cork airports should be sold to competing airport operators who would run them in a low cost, efficient manner. Irish tourism urgently needs the development of a competing terminal at Dublin Airport to force down the DAA’s high cost and rampant inefficiency. This is the solution being followed in the UK and it is the only way forward in Ireland. Irish tourism and the Irish economy can no longer afford the high cost, inefficient DAA monopoly or the corrupt manner in which the Dept of Transport protects and defends the DAA monopoly at the expense of users, consumers and Irish tourism.”