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Tuesday, May 21, 2024

Aer Lingus and Ryanair have combined forces to legally dispute the capped levy on airline services


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Aer Lingus and Ryanair have joined forces with Dublin Airport operator DAA in a High Court challenge of a regulatory decision to set a maximum price cap on the charges they can levy against airlines. The DAA, with its registered office at Dublin Airport in Swords, claims this cap will cost them millions and could have negative effects for passengers. Airport charges represent around half of Dublin Airport’s revenue, and are paid by airlines for the use of its services and facilities, such as runways and airport security.

On Monday, the Commercial Court heard Aer Lingus Limited and Ryanair DAC state their case for being included in the proceedings. Ryanair had previously declared their support for the regulator and their opposition to further increases in passenger charges. The court was satisfied that the case had a significant commercial aspect and granted the DAA’s application to enter it into the fast-track commercial list.

The appeal hopes to overturn parts of the decision to put the price cap in place. The DAA argues that the commission abdicated their judgement to consultants and relied heavily on undisclosed international benchmarks. They also claim the commission failed to take into account the exceptional circumstances of the pandemic, and did not provide reliable evidence to support their dismissal of the DAA’s forecast. The DAA also charges a breach of fair procedures in the decision-making process and deficiencies in the commission’s calculation of Dublin Airport’s cost of capital and inflation adjustment.

Price cap regulation of airport charges is a common practice, but Dublin has one of the “most onerous regimes”, according to the DAA. The case was adjourned for two weeks, and the DAA awaits the outcome of the challenge to the regulatory decision setting the maximum level of airport charges Dublin Airport can levy at airlines for 2023-2026.

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