Oireachtas Joint and Select Committees

Wednesday, 15 May 2019

Joint Oireachtas Committee on Transport, Tourism and Sport

General Scheme of the Aviation Regulation (Amendment) Bill 2018: Department of Transport, Tourism and Sport

Mr. Ronan Gallagher:

-----albeit it took some incidents to draw attention to that. It is a type of a one stop shop to which consumers can make complaints and from which they can seek advice. That was the logic behind it. We are always in discussion with the CAR about resources. That happens on a rolling six-monthly basis. If there are resources that come from those extra functions, we will consider those. It is not clear with this one that it fundamentally changes what it needs to do but that is something we will discuss with it. We certainly will not be asking it to do things that it does not have the resources to do.

In terms of the other changes in the general scheme proposed, our view is that they do not add additional responsibilities on or accountability to the CAR but they certainly give it extra powers and authority, and that probably will make its job that bit easier in terms of compliance.

On the appeals procedure, that is something we will debate as the general scheme progresses to being a Bill. That proposal essentially falls in line with Government policy under the 2013 economic regulation policy which, among its recommendations, provides for streamlining the appeals process and the use of the commercial courts. Currently, the Minister, as an interim step - obviously, one can always go to the courts as a final step - appoints an expert panel. In terms of Government policy, there are ad hocpanels in various pieces of legislation and often their impact is to provide a stepping stone. If a matter is substantive it ends up in the High Court anyway and the idea is to shorten that so that we would have some regulatory certainty.

With respect to costs, while I have not been involved in it, I understand that through even the ad hocappeals process, depending on who it is that is appealing - let us be clear the appeals are by either Dublin Airport or the two big airlines, Ryanair and Aer Lingus - the various parties lawyer up and it is an expensive processThis is not High Court access to individual users. They tend not to be and so far have not been parties to the regulatory process. It is the airport and the two big airport customers that engage in the process.

On the overall regulatory policy, the fundamental principle around price regulating at Dublin Airport is established existing policy but we tested that with the Indecon review. The advice from that process was that the DAA had substantive market power and that this dominant position justified a continuation of price regulation. The Senator pointed out that Heathrow has a similar level of regulation. That represents Heathrow’s market power within the British market, albeit that it has substantially more competition where it has competitive advantages in terms of its scale and connectivity. There are the other London airports and Manchester and Birmingham airports but the other London airports do not have anything like Heathrow's connectivity and Manchester and Birmingham airports are not near London, therefore, Heathrow is in a dominant position. The market assessment of Dublin Airport's power was that its customer base essentially was the entire island, albeit that the other airports provide services and are able to compete. If Dublin Airport was left unregulated, the risk would be that it would extend its market power and that would have a negative impact on the regional airports and the other two State airports as well as the airports in the North.