Consultation on the decisions of the 2010 Aviation Appeal Panel

(08 Jun 2010)

The Commission has today published the Decisions of the 2010 Aviation Appeal Panel ('the Panel').  The Commission has also published a Consultation Document CP1/2010 inviting comments from interested parties on the matters referred back to it by the Panel. Parties wishing to make submissions in response to the consultation should do so no later than 5.00pm on Tuesday 22 June 2010.

Background

On 4 December 2009 the Commission published its third determination on the maximum level of airport charges that may be levied by Dublin Airport Authority (“DAA”) at Dublin Airport. The determination covers the five-year period from 1 January 2010 to 31 December 2014 and is expressed as an annual per passenger price cap. This Determination is published as Commission Paper 4/2009 (“CP4/2009”), and can be downloaded by clicking on this link.

On 4 March 2010 the Minister for Transport established an appeal panel under Section 40 (2) of the Aviation Regulation Act 2001 (“the Act”) to consider the appeals of three parties – Aer Lingus, Ryanair and DAA. The Appeal Panel issued its decisions on these appeals on 2 June 2010 and referred a total of seven matters back to the Commission. 

The 2001 Act provides that the Commission, upon a referral by the Appeal Panel, shall within two months of receipt of referral either vary or affirm its original determination. The decisions of the Appeal Panel are summarised below. For further information on the appeal panel’s reasoning on each of the three appeals, the Panel's decision in respect of each of the three appeals can be downloaded here: Aer Lingus, DAA and Ryanair.

The panel concluded that sufficient grounds existed in respect of one of Aer Lingus’s five grounds:

  • The overspecification of T2 – to consider how the recovery of increased overheads associated with the overspecification of retail space in T2 could be postponed until commercially justified.

The Panel concluded that sufficient grounds had been established in respect of two of Ryanair’s nine grounds:

  • Differential Pricing – the panel referred this matter back to the Commission for it to consider how best differential pricing might be initiated
  • To carry out an analysis of the extent of incremental retail revenue attributable to T1X before allowing the capital expenditure associated withy this project into the RAB

The Panel concluded that sufficient grounds had been established in respect of four of the DAA’s eighteen grounds and referred back to the Commission the following matters:

  • An error in the treatment of PRM revenues in the calculation of the price cap – to review whether there has been an error resulting in double counting for PRM charges
  • An error in the treatment of inflation in reconciliation of CIP 2006-09 outturn costs – to review and consider the effect of its application of deflation of -6.6.% for 2009 to DAA’s submitted figures (which had allowed for an estimated inflation figure of 4% for 2009)
  • The disallowance of €15.3m in respect of Pier D costs
  • The disallowance of temporary forward lounge (“TFL”) costs of €6.2m and   Pier D fit-out costs of €1.2m
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