Mr. Pádraig Ó Ríordáin:

I thank Senator O'Brien for his pertinent questions. I will address the first question on remuneration policy for the chief executive. This issue goes beyond the daa because of the issue of State policy on chief executive pay throughout the sector.

I understand there are different perspectives concerning the country as a whole. I come at this from the perspective of trying to get a company to operate optimally for the benefit of the State. People like Mr. Kevin Toland are genuinely a rare commodity. He has come back from a job in which he earned a significant multiple of what he will earn with daa. It is a job he does extraordinarily well. It is important for us as a country to value that type of leader because they really do make a difference in how a company operates. I can already see that clearly in daa. In a couple of years, this will be seen amazingly clearly. I am not here to propose Mr. Toland’s salary should be moved to X or Y. When he was appointed, the Government was looking at a policy of introducing performance-related pay. That has not come to pass, however, which I am sure is a disappointment for him. He is still on exactly the same salary that he was on several years ago. I am very much of the view that a bonus means a bonus or that performance-related pay should be related to real performance. This is done all the time throughout private companies, whereby remuneration committees set very clear targets. Mr. Toland himself sets very clear targets for his people internally which was not really the case before in the daa. I agree some of these matters need to be carefully calibrated and implemented. The point I am making, however, is that there really is a necessity for this to retain people in the system.

Developing Dublin as a transatlantic hub is one of the biggest developments in the airport for several years. It will give the airport much critical mass and will support connectivity from Ireland across the globe. We can support that connectivity with English and Scottish air passengers who come through Dublin Airport and use its routes. It does not just support the airport financially with, say, landing charges and what people spend in the airport, but it also supports how we can market Dublin to a greater range of international airlines. We can tell airlines that if they have the passenger loads, we can produce them, and it is not just from the Irish population but also by feeding people in. It is a fantastically strong message. We have new relationships, to which the Senator alluded, such as Ethiopian Airlines coming through Dublin to pick up passengers and move on under fifth freedom rights, an exciting development. Capital expenditure will be needed because we have to reconfigure some parts of the airport to make the product for transfers much more efficient. This is a significant priority. There has been some resistance to this by some of the airlines at regulation level but it is important to the company’s development.

I referred to the second runway because we are moving to a phase where we will need one. A second runway would be tremendously good for Ireland in the long term. It is amazing when one looks back at how previous generations of daa management had worked on planning for a second runway. Their work is fantastic and quite extraordinary in comparison with other airports like, say, Heathrow. A good landbank has been secured to ensure the airport is not on top of its neighbours. It is too early to get into the details of this. I am just flagging this as something we will look at in the medium to longer term to start that process. There is nothing imminent in this area but it is a development we keep an eye on all the time. We will have a full conversation with our neighbours when the time comes. The daa in general is very conscious of its position in the community and of its neighbours.

I am not sure why we have not commented on the greater Dublin drainage plan. It may be an issue concerning the project’s distance from the airport but I will check it out for the Senator. Generally, we pay a lot of attention to any planning issues or projects that will affect the development of the airport in the long term and we do respond reasonably well to these.

Pension provision is a very emotive issue. As a board, we really care about this issue because it impacts on individuals’ lives for a long period, as well as their quality of life in retirement.

The problem we face is one that has not been addressed in 60 years. Some of the anomalies in the scheme genuinely are anomalies. For example, there is a double pension in the scheme. I will try to explain how it works. I was amazed when I took up my position at the airport to learn how this works. Generally speaking under a defined benefit scheme a €30,000 pension is met with €18,000 from the scheme, with the remainder being met through the State pension. That is how it operates everywhere. Because of an anomaly in the IAS scheme, a person who retired on his or her 65th birthday would get a €30,000 pension but a person who retired earlier than that would receive a pension of €30,000 from the IAS scheme plus the State pension, bringing the total pension to €42,000. The difficulty is that none of this was funded. People who contributed to the scheme were contributing to the €30,000 pension, not the €42,000 pension. That level of payment becomes unaffordable because, as I said, it is unfunded. Under the IAS scheme, the trustee has been paying that for some time. It is a double pension.

In terms of what is now being proposed - this has gone through the Labour Court, the LRC and the expert panel - the expert panel has proposed that the fairest possible way of resolving this is exactly what has been proposed by daa, namely, that all active members of the scheme would have their pensions reduced by approximately 20%, that €72 million be provided by daa to bring their final pensions back up to €30,000 and there be no further payments of the double pension. People have said that what is proposed is very complex. I agree it is very detailed. However, when it comes down to what is on the table, as proposed by the expert panel, and what daa, as a company, has genuinely stretched to do, it is a fair offer.