For aviation, 2025 is a year when the focus will be as much on the ground as in the air as European courts and Irish planners separately weigh various aspects of the controversial Dublin Airport passenger cap.
EU judges are the latest group to get sucked into the row, joining airports company, DAA, local residents, politicians, Government ministers, councillors and airlines in a wrangle that has dragged on for almost two years.
Planning appeals board An Bord Pleanála set 32 million as the maximum number of passengers that Dublin can handle in a year in 2007, as a condition of allowing airport operator, DAA, to build Terminal 2.
The move was meant to ease fears of traffic jams on the roads leading to the gateway. Those roads have long since been upgraded, while regulators this year acknowledged that the airport can now comfortably handle far more people than the cap allows.
DAA has since built and opened a new runway, which one of its biggest customers, Ryanair, says gives the airport the capacity to handle up to 60 million passengers a year. In early December, Mr Justice Barry O’Donnell referred the issue to the Court of Justice of the European Union (ECJ) following a challenge by Ryanair, Aer Lingus and several US carriers.
Shortly before that, DAA submitted its response to questions posed by the local planning authority, Fingal County Council, on its application to raise the cap to 40 million, which was part of an overall request for permission to expand the airport’s facilities. The State airports company hopes that the council will decide on this relatively early in 2025, but believes that any decision risks an appeal.
Meanwhile, it intends to ask the council to raise the cap to 36 million within a few weeks. That will not involve the company seeking permission to build anything as it is an interim measure while the 40 million application goes through the planning system.
Notwithstanding all of this, the cap now looks redundant. In November, Mr Justice O’Donnell blocked the Irish Aviation Authority (IAA) from limiting airlines at Dublin Airport to a maximum of 25 million passengers between next March and October, pending the outcome of the airlines’ challenge in the High Court.
As that has gone to the ECJ, there will be no outcome this side of next summer, when the limit would have applied. Consequently, airlines are likely to seek extra capacity for that period, pushing Dublin Airport passenger numbers to 35 million next year and breaching the cap.
While DAA chief executive Kenny Jacobs says the company has taken steps to dampen demand, it cannot legally stop airlines or passengers from using the airport. The only way to ensure compliance is to limit available take-off and landing slots, which is the IAA’s remit. The authority did so following submissions from the airport company, imposing separate winter and summer limits.
That prompted the airlines to seek a review of the decision by the High Court, as they argued that the IAA should not take the planning condition into account when deciding how slots should be allocated. This triggered the ECJ referral. The cap conflicts with EU law on several fronts, including the bloc’s rules on how airport slots are allocated and member states’ obligations under air travel treaties with North America.
So, as it stands, the cap remains in place, but the courts have stalled the only means of guaranteeing compliance. Carriers have already signalled that they will expand at Ireland’s biggest airport next year. Ryanair pledged to add about one million seats while US-based United Airlines recently announced increased summer services between the capital and Washington DC and Chicago.
Dublin Airport could ultimately handle 55 million passengers, DAA told Fingal in November. Others say the total could be even more. Businessmen Des and Ulick McEvaddy submitted “outline” plans for a third terminal there to Fingal earlier in 2024, which they argue could bring the total to 64 million.
The McEvaddys are part-owners of land between Dublin’s two runways, where they hope to locate the new terminal. While their company, DA Terminal 3, submitted proposals in April, the brothers, along with co-owners Seán Fox, and Brendan and Orla O’Donoghue, had put the site on the market 10 months previously. Recent reports also said they were selling their US-based Omega Aviation business, which provides mid-air refuelling for military aircraft.
DAA is sceptical about the airport plan. Jacobs has told politicians several times that the site would not be suitable for a third terminal, should the State company ever decide that one is needed. The McEvaddys maintain that DAA’s own proposals are short-sighted.
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Separately, Aer Lingus was in the news this year when a pay row with its pilots erupted into a full-blown industrial dispute in June. In January, members of the Irish Airline Pilots’ Association (Ialpa), part of trade union, Fórsa, rejected an 8.75 per cent pay offer tabled by a company tribunal. They demanded more than 20 per cent to compensate for the punishing inflation of the last few years.
Efforts by the Workplace Relations Commission and Labour Court failed to broker a deal by May. In June, pilots voted overwhelmingly for industrial action. They embarked on a three-week industrial action, consisting mostly of a work-to-rule, but which included a one-day strike.
This forced Aer Lingus to cancel about one in eight of its scheduled flights through its busiest and most profitable time of year. Two subsequent Labour Court interventions resulted in a 17.75 per cent increase for pilots, for which they voted in July, ending the row.
The airline estimated that the dispute cost it €55 million, not counting the unquantifiable loss of potential bookings during the industrial action or the damage that its reputation was likely to have suffered. More recent communications between the pilots’ union and management indicate that relations between the pair have thawed considerably.
Meanwhile, the carrier will meet representatives of cabin and ground crews in January to discuss pay. A deal with those groups allowed them to revisit their 12.25 per cent increases, finalised at the end of 2023, should any individual group of workers in the airline have their pay boosted by more than this amount, without additional productivity – in other words, justifying any higher increase by the delivery of more work.
Immediately after pilots accepted their deal, Aer Lingus pointed out that it ran for longer than those struck with other workers and did, in fact, include some productivity gains as it jettisoned an arrangement with Ialpa on summer leave. Unions representing other groups, including Siptu, still sought the opportunity to discuss the deal in light of their own members’ agreements.
Aer Lingus is taking delivery of new Airbus A321 long-range jets that will give it more scope to cash in on demand for transatlantic flying, a key part of its business. It recently announced new US services, including Dublin-Nashville. And its chief executive, Lynne Embleton, confirmed that it would not be cutting capacity in Dublin next summer.
US carriers are increasingly competing with Aer Lingus for business, which is at least good news for anyone who fancies a trip across the Atlantic in 2025.
Ryanair, for its part, is looking to take delivery of Boeing aircraft it has on order. Problems at the aircraft manufacturer, which has endured an annus horibilis in 2024, saw the Michael O’Leary-led carrier cut its passenger growth target for next year to 210 million from 215 previously because of delays in the delivery of aircraft.
Ryanair – Boeing’s largest customer in Europe – had been scheduled to receive 30 Boeing 737 aircraft between March and June next year to help it meet its ambitious growth targets. By October, O’Leary accepted that was unlikely.
“We won’t get all 30 aircraft; if we get 10, or 15 or 20 we will be doing well,” he told an industry conference. He described the delays as “a pain in the backside” and is also in dispute with Boeing over compensation for the failure to hit its targets.
What was supposed to be a comeback year for Boeing turned into its worst stock-market plunge since 2008, with the shares down 35 per cent, placing it among the worst performers in the S&P 500 index.
Coming into 2024, the company seemed to be emerging from the aftermath of two fatal crashes of its jets in 2018 and 2019 and the collapse of global travel during the pandemic. Boeing had taken a big step toward thawing its strained relations with China, jet orders were surging and shares were the highest in nearly two years. Wall Street was overwhelmingly optimistic, without a single sell recommendation on the stock.
Things started to unravel early. In January, a door plug on a Boeing aircraft blew off mid-air during an Alaska Air flight. Then came a public outcry and intense scrutiny of Boeing’s corporate practices and its culture, a management overhaul leading to the exit of the chief executive officer, serious allegations from whistleblowers, a debilitating labour strike and a large cash burn that the company says will continue in 2025.
And as the year drew to a close, the embattled aerospace group’s efforts to put past failings behind it were thrown off track as a federal judge in the United States rejected a plea deal that sought to let the plane maker avoid criminal prosecution over the two fatal 737 Max crashes, clouding its outlook in further unwelcome uncertainty.
While Boeing said earlier this month that it had fully restarted operations in the Renton, Washington complex south of Seattle, where it manufactures its bestselling 737 range, the US plane maker continues to lose ground to Airbus, its main rival. The European aircraft manufacturer delivered 84 jets in November, bringing its total for the year to 643 aircraft. Boeing has delivered 318 planes.
A big worry entering 2025 is that the company’s sprawling global supply chain leaves it exposed should Trump follow through on his tariff proposals. Boeing is widely seen as being on the front lines of any trade war that might ensue.
Concrete signs that the company can produce quality aircraft at a steady pace is crucial for investors and analysts in the year ahead. There is plenty of demand for planes globally – fuelled in part by surging air travel in emerging markets but also by customers, such as Ryanair, still waiting on promised aircraft.
O’Leary has said it is likely to take Boeing two to three years to get back on track. “Just staying out of the news would be a win for Boeing at this point,” said Eric Clark, portfolio manager of the Rational Dynamic Brands Fund. – Additional reporting Bloomberg
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