The Commission for Aviation Regulation has published its final determination on air traffic control charges (ATC) levied by the Irish Aviation Authority (IAA) on airlines using the airports in Cork, Dublin and Shannon. The determination will come into force on 1 January 2012 and will apply until 31 December 2015 and will result in a 40% decrease in charges over the four year period. ATC services are used by aircraft landing and taking off from airports.
The first year of the price cap in 2012 will result in a price reduction of approximately 25 per cent on the 2011 price cap. Thereafter, the cap is expected to fall a further 6 per cent each year.
The significant fall in the 2012 price cap is due to a lower level of investment planned by the IAA for the next regulatory period, compared to when the current cap was set (2007). In addition, the Commission has ‘clawed back’ revenues collected by the IAA to fund investments it subsequently did not make. Finally, after 2012, given the sharp traffic decline in recent years, the Commission has set progressively lower operating cost allowances to bring the IAA’s operating expenditures by 2015 back to the level of 2006 when traffic was similar to that expected for 2015.
Commenting on the reduction in the price cap, Cathal Guiomard, the Commissioner said,“This determination, the Commission’s third since 2001, has been made against the background of a severe global and national economic downturn. The aviation sector has been hit hard: the number of flights in and out of Irish airports is forecast to be at the same level in 2013 as in was in 2001.
The IAA plans to carry out less investment spending in the next regulatory period than in the current one. The Commission has, in addition, set challenging but achievable efficiency targets for the IAA’s operating spending to bring costs back into line with the lower levels of traffic expected. Taken together, these steps will allow the IAA’s terminal charges to fall by over 40% in the next four years.”
