THE DUBLIN Airport Authority (DAA) is planning to offer steep discounts on passenger charges to airlines that launch new routes this year as it bids to reverse a 13 per cent decline in passenger traffic in 2009.
It is understood that 39 airlines and other interested parties have been invited by the DAA to a meeting at Dublin airport on Wednesday, at which airport director Bob Hilliard will outline its latest financial incentives.
The DAA plans to extend the discounts on its route incentive scheme for new short-haul services from Dublin.
Previously, the discounts – a marketing tool commonly used by airports globally to attract new business – focused on cities not traditionally served from the capital, such as Athens in Greece, Helsinki in Finland and a number of non-EU destinations.
The DAA hopes to incentivise Ryanair and Aer Lingus, who between them control about 75 per cent of traffic at the airport, to fly into cities in Britain, Germany, France, Italy and Spain not currently connected to Dublin.
In addition, the DAA has extended the discounts to cover five rather than three years.
Under the new plan, airlines will receive a 100 per cent discount on passenger charges in year one of the route, reducing to 90 per cent in the second year, 75 per cent in the third year, 50 per cent in year four and 25 per cent in the final 12 months.
The same incentives will also apply for new long-haul routes.
In parallel with this, the DAA is planning to waive passenger charges once the number of travellers using Dublin airport hits a certain level.
It’s not clear what this number is but it is thought to be close to the 19.5 million projection for passenger traffic this year at Dublin airport published in 2009 by the Commission for Aviation Regulation (CAR) during its deliberations on airport charges from 2010 onwards.
If traffic at Dublin this year was to match the expected 2009 figure of 20.5 million, the DAA would be forfeiting charges for about one million passengers and potentially take a €9.3 million hit on its revenues.
Airlines would benefit proportionally, based on their throughput at the airport.
The DAA is prepared to take the financial hit on airport charges in the hope of stimulating traffic and generating revenues from its car parks, restaurant and bars and retail concessions.
CAR last year gave the DAA permission to increase passenger charges to a maximum average €9.32 per journey in and out of Dublin airport from the current €7.39.
This drew an angry response from Ryanair and other airport users.
CAR’s decision was based on allowing the DAA to recoup the cost of building the new Terminal 2 and followed a direction from Minister for Transport Noel Dempsey.
Traffic at Dublin airport peaked in 2008 at 23.5 million.
It fell last year by 13 per cent, and is predicted to decline this year as airlines continue to reduce capacity.
Meanwhile, T2 is due to come on stream in October with a capacity of 15 million passengers.
The DAA is desperate to boost its flagging traffic numbers in advance of this opening and has resisted calls to mothball the facility.
