Committee Reports > List of Committees > Joint > 1979 > Committee on Commercial State-Sponsored Bodies > Report No. 06 - Aer Rianta Teoranta

APPENDIX 5

LETTER TO CLERK TO JOINT COMMITTEE FROM AER LINGUS

I refer to your letter of 18 May seeking the views of Aer Lingus on the operation of Aer Rianta Teoranta.

As far as Aer Lingus is concerned the facilities provided in the Terminal and ramp areas by Aer Rianta are satisfactory and compare favourably with other international airports. With some exceptions, other facilities at the airport are satisfactory. The exceptions are as follows:

1.Category 2 landing facilities are available at practically all European airports but not so in Ireland. Our aircraft are equipped and crews are trained. This facility, if available, would permit landing in certain weather conditions and therefore reduce the number of interrupted flights.

2.Each Irish airport has Instrument Landing System facilities at one end of each main runway. Most European airports have it at both ends. Here again, if it was available at both ends at Dublin, Shannon and Cork it would lead to less interruption of operations.

We find that landing fees at Irish airports are very high. The impact of this bears most heavily on Aer Lingus and Aerlinte since we are by far the greatest users of the airports. The landing fee for a Boeing 737, for example, loaded to 60% of its seat capacity, amounts to IR £358. This compares to £211 for London (standard charge; there are higher peak charges and lower off-peak charges), IR £296 for Paris, and IR £196 for Rome, and in fact is the fourth highest in the European stations we serve. On the North Atlantic route the landing fee at Shannon is very much greater than the corresponding fee at the US end of the route. This disparity is further aggravated by virtue of the fact that we have a compulsory stop at Shannon on every flight regardless of traffic.

With regard to the structure of Aer Rianta, we believe that it is important that that company be set up as an autonomous body. This would give it freedom to operate on a commercial basis. It should have substantial borrowing powers since a good deal of investment will be required at the airports, particularly at Dublin Airport, over the next decade. This investment would include the possible construction of a new runway and the alteration and renewal of existing runways and taxiways. The many landing aids should be the responsibility of Aer Rianta as an autonomous body and this would call for it to make the investment required to make good the deficiencies already referred to earlier.

In addition to the investment in runways etc. there will be a requirement for substantial addition to hanger space at Dublin Airport in the fairly near future and it will be appropriate for such accommodation to be provided by Aer Rianta.

In setting up Aer Rianta as an autonomous body, it must be given a commercially viable capital structure that would not lead to excessive borrowed capital and interest charges since these will certainly bear heavily on the operators and, in particular, on ourselves. In capitalising Aer Rianta we believe that the bulk of the existing facilities which have been financed over many years by on-going Government expenditure should be given as the equity base of the new company on which they would structure such additional borrowings as would be required.

I trust that these comments will be helpful to the Committee.

1 June 1979