Oireachtas Joint and Select Committees
Wednesday, 18 January 2023
Joint Oireachtas Committee on Transport, Tourism and Sport
National Aviation Policy: Dublin Airport Authority
Gerry Horkan (Fianna Fail)
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The purpose of today's meeting is to resume our discussion of national aviation policy and to receive an update on security arrangements and passenger services at Dublin Airport. We are joined by the new chief executive of the Dublin Airport Authority, DAA, Mr. Kenny Jacobs, and other representatives of the DAA. I am very pleased to welcome: Mr. Jacobs, the new CEO of the DAA; Ms Catherine Gubbins, CFO of the DAA; and Mr. Vincent Harrison, the managing director of Dublin Airport, a part of the DAA. They are all very welcome.
Witnesses are reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable, or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory in relation to the identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with any such directions.
Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses, or an official, either by name or in such a way as to make him or her identifiable. I remind members of the constitutional requirement that they must be physically present within the confines of the Leinster House complex in order to participate in public meetings. I will not permit a member to participate where he or she is not adhering to this constitutional requirement. Therefore, any member who attempts to participate from outside the precincts will be asked to leave the meeting. In this regard, I ask members partaking via MS Teams that prior to making a contribution to the meeting they confirm that they are on the grounds of the Leinster House campus. If attending in the committee room, they are asked to exercise personal responsibility to protect themselves and others from the risk of contracting Covid-19.
I invite Mr. Jacobs to make his opening statement.
Mr. Kenny Jacobs:
I wish the members of the committee a good afternoon and thank them for the invitation to discuss national aviation policy. We look forward to engaging with them on that. We will also give members an update on security and services at Dublin Airport. This is my first committee outing as DAA CEO, having joined the business last Monday. I am excited to have joined what is a great business in Irish aviation with four important business units: Dublin Airport; Cork Airport; Aer Rianta International; and DAA International.
The DAA plays a pivotal role in Irish aviation. Both Dublin and Cork Airports provide the connectivity that is essential to the success of our island’s economic growth, in-bound tourism and social cohesion, while allowing us to get away for holidays and to see family and friends. As has been well documented, at the end of May last year there were unacceptable security queues that resulted in flight cancellations at Dublin Airport. The experience at Dublin Airport last summer was not what we wanted, especially on security queues and the overall standards at the airport. Since then, our dedicated team has changed the way we do things to improve security and standards for our passengers and airline customers and to continue to support and develop our people. We have more to do, which we will tell the committee about today.
As the new CEO, my number one priority is to continue to deliver better airports for all our passengers. At Dublin Airport, this means a strong focus on operational performance, security, standards, and resilience to make sure the travelling public get the service they expect and deserve. The DAA has many stakeholders and the most important of these are the passengers who use our airports. As the gateway to Ireland, Dublin Airport must deliver for both our passengers and airline customers and be appropriately resourced so it has operational resilience, through seasons and through various economic cycles.
This past Christmas, just under 1.5 million passengers travelled through the airport and, of those departing, 93% went through security in 20 minutes or less, while 99% of passengers went through security in 30 minutes or less. The 30-minute mark is a key regulatory standard and 20 minutes is our internal target at the DAA. That is a strong basis on which to build and I would personally like to commend all of our staff at Dublin Airport who really put their shoulder to the wheel to deliver for our passengers during this busy peak period. I am, however, aware that to build on this success and continue to improve the quality over the course of this year and beyond, two key things need to happen.
First, there is an industry-wide resourcing issue. At times that resulted in queues at security and sub-optimal airport standards. There were issues around baggage handling and aircraft de-icing and opening times for airline check-in also need to be addressed by airlines and ground-handlers. We will continue to work with our airlines and handlers to ensure all of us give passengers a better experience in this regard. Second, there needs to be a sustainable pricing and regulatory environment in place to support the provision of consistent service quality levels at Dublin Airport. In this respect, the recent pricing decision by the Commission for Aviation Regulator, CAR, has a direct bearing on the number of staff that Dublin Airport can hire in security, cleaning and other key areas. In its decision, the regulator has disallowed the recruitment of up to 240 of the security staff needed at Dublin Airport by 2026, which, in the context of learnings post-Covid, is both unwise and inexplicable.
It is clear to us that passengers, airlines, Government and this committee wish to see greater operational resilience at Dublin Airport, and to restore efficiency and passenger experience to pre-Covid levels. However, there is a clear misalignment between the service quality standards which policymakers and other stakeholders require from Dublin Airport and the revenues allowed by the regulatory system to fund them going forward. We are not against independent regulation and we want to have a solid relationship with the regulator but the modelling done to arrive at the price cap needs to allow for greater resilience and service levels.
Dublin Airport already has the lowest charges of 18 similar-sized airports across Europe. At a time of record cost inflation, when air fares last summer went up by 40% across Europe and are expected to increase by 15% to 20% this coming summer, it makes no sense that airport charges remain substantially less - 30% lower - than 2019 levels. The reality is that changes in passenger charges have virtually no impact on the price that an airline charges for a flight so passengers should not expect their air fares to go up. Now is the time to review aviation policy and to reflect on the role of all players operating within the aviation ecosystem in Ireland, including the regulator. We need to reset the system of regulation on charges, post the Covid crisis, post the learnings from last summer and before we have the next economic, health or other crisis. We all want a Dublin Airport that is resilient and can grow and give passengers a better service. If this is what we want then it must be reflected in national aviation policy and the regulated price simply must go up.
Beyond regulation I would like to touch on a few other key areas of aviation policy. As an island nation on the periphery of Europe, Ireland’s aviation sector must be enabled to continue to support economic growth and development. An overriding objective of the aviation policy should therefore be to expand existing connectivity and promote new air connections. This is particularly important as we emerge from the Covid crisis and continue to face a relatively unstable international geopolitical and economic landscape. Dublin Airport delivers unrivalled global connectivity for Ireland. Ensuring Ireland’s largest gateway can continue its development as a key European secondary hub is critical to the economic development of every region in the country. Simply put, when Dublin Airport is winning then Ireland is winning. A secondary hub involves facilitating through-traffic and based aircraft and connecting Ireland to a range of destinations that might otherwise be commercially or geographically challenging.
Momentum in this area will provide a much-needed boost to our tourism, foreign direct investment, FDI, and aviation sector. A lack of momentum will see us lose connectivity, jobs and opportunities to competing airports, particularly across the UK and also in Europe. To facilitate the delivery of the connectivity benefits that a hub can provide, the DAA plans to invest €1.9 billion in facilities and infrastructure over the coming years. It is therefore hugely important that Dublin Airport is supported by national policies which are progressive and which encourage the development of airport infrastructure and growth in passengers and movements. This is particularly important in areas such as planning and regulation.
Cork Airport had a strong performance in 2022, with just over 2.2 million passengers using the airport and it continues to give passengers an excellent service. I was in Cork Airport last week and I have no doubt it is one of the best regional airports I have seen across Europe. It is growing and giving the south of Ireland a great choice of destinations, which has increased for this coming summer.
I want to see Cork continue to grow and I know there are ambitions to reach 3 million passengers over the coming years. We have plans in place to continue to invest in Cork Airport’s infrastructure to support its growth, including the delivery of C3 cabin baggage screening.
Finally on Cork, I am aware that a review of the regional airports’ programme is under way. This programme has provided valuable support to the airport to rebuild traffic volumes following the pandemic. It is critical that Cork Airport continues to be part of this programme to support the development of the airport into the future.
My final point, which is key to the future of the aviation sector and something I am personally committed to, is sustainability. Since 2010, Dublin Airport has reduced its carbon emissions by 26% while welcoming an additional 14 million passengers and expanding its infrastructure. We have made a commitment to achieve net-zero carbon emissions across our operations by 2050. While this is challenging, we fully intend to transition our business to achieve this goal. This will be underpinned by the delivery of energy efficiency measures, fleet changes to zero and low-emission vehicles and the integration of on-site renewables such as solar PV and electrification to reduce our campus energy requirements.
Looking beyond our own direct operations, airports act as ground transport hubs and play a key part in the national shift to public transport. This needs continued focus and support. In particular, we fully support the prioritisation of key public transport projects to Dublin Airport. This includes both Metro North and BusConnects. Increasing public transport options for passengers will ultimately reduce private car dependency and support both DAA’s and the Government’s drive towards net-zero.
We also actively engage with the wider aviation sector on the delivery of other key sustainability initiatives, such as the use of sustainable aviation fuel, SAF. The airport infrastructure to deliver it already exists; the bigger issue will be securing the supply of SAF in Ireland. Ireland should be a leader on SAF in aviation and we fully support airlines increasing their usage of SAF and investing in newer aircraft that have lower CO2 per passenger kilometre.
Given the rapid advancements in both transport and aircraft technology, we expect that our airports will have to provide for multiple different types of fuelling and powering options at our campuses within the next decade, including electric powering and the use of green hydrogen. It is important that aviation policy reflects the future demands of airlines and passengers in terms of fuelling and the impact that this will have on airport infrastructure and planning.
Finally, we support a Single European Sky. This would immediately reduce emissions by 10% to 12% by preventing longer than necessary flight lengths caused by inefficient air traffic control across continental Europe.
In summary, my objectives for DAA are as follows: to continue to improve the resilience at Dublin Airport - that means security and operating standards; to rebuild pride among our people, and we have outstanding people in all parts of the business; and to work with our airline customers to deliver growth so that Ireland has the connectivity it needs and achieves this in a way that is sustainable. Ireland is probably the most respected country in aviation. We have a great history and are fantastic when it comes to airlines, airports and aircraft leasing. Ireland is very respected as a leader and we should all be very proud of that. DAA is an important part of this and will continue to be a good part of that for the years ahead. I thank members for their time and am happy to answer any questions they may have.
Ruairi Ó Murchú (Louth, Sinn Fein)
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I congratulate Mr. Jacobs and thank all the witnesses for coming before us. A number of people have appeared before us in the past while. The Single European Sky is the sort of solution that works for everybody in terms of reducing the number of logistical nightmares people face with delayed flights along with reducing emissions because you are reducing the amount of fuel that is wasted so that goes without saying. This is something we need to keep on the agenda and the Government needs to put on the agenda. The European Commission must do what it can regarding delivering it. It is one of those things nobody is going to get up and give out about.
We need to make sure that what happened last summer does not happen again whether it relates to baggage handling, cancelled flights and the mad queueing scenario. I welcome the fact that Mr. Jacobs spoke about streamlining. Are we fairly sure we will not have those difficulties this summer? We know some of those difficulties were due to the impact of caps at Heathrow. Could Mr. Jacobs tell us how many staff are employed and how many we need to employ to make sure we are at that critical mass?
Mr. Kenny Jacobs:
I think everyone agrees that it would be a good thing. It is an instant thing that could be done. Nobody wants to spend time sitting on a plane on tarmac. It is ongoing at EU level. I have been in aviation for more than a decade, people were calling for it a decade ago and we are still waiting for something to happen.
Regarding whether we are ready for this summer, I am very confident that we are doing everything we can and that the right focus is there to make sure we get there so that security is not an issue this summer. We have 645 staff in security, which is roughly in line with where we were in 2019. We are modelling that we want more resilience and we are trying to get up to 800 staff at the peak for this summer. That gives us a buffer so that if things happen, we have the right flexibility to cope with that so we are trying to get from 645 to 800. Twice a week, we sit down and ask how many we have hired this week and what our retention rate this week is. I do not think pay is a barrier. A total of 98% of our unionised staff voted in favour of a pay deal as late as November, which is a good sign. Many businesses would not have such a positive vote.
Ruairi Ó Murchú (Louth, Sinn Fein)
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Like everyone else, it is the difficulty of getting people into the job in the first place. What is DAA's retention like?
Mr. Kenny Jacobs:
I think it will settle down compared with previous years because we were in the pandemic and then had the issues in the airport and across aviation last summer. It is getting from 645 to 800. Every week, we look at whether we recruited enough people. The bit that is in the middle is whether we get people from recruitment to actually working in security quickly enough. Last summer, we did not have enough instructors. They are the people who train someone to become a member of the security team. We will have 12 instructors, which is a small number, but it really gets us from recruitment to people actually doing the job. We have added a new role, which is that of supervisor. These are very experienced security people who would have worked the lanes and are now supervisors. I was at the airport last Saturday and met this team. That is a really important role. In the peak of summer or on Good Friday, they are the people who will really keep the show on the road and make sure we move people from this lane to that lane to make sure everything is going well so I am very confident that we are focusing on the right things, we have the right pace and energy and we are looking at the key things. The training piece is broadly done. It is now down to recruiting in a tough market. Everyone in aviation is struggling to find staff. We must make sure we are doing everything we can. Pay is not a barrier. Of course, we will go faster and ensure we are recruiting faster and reducing the attrition rate.
Ruairi Ó Murchú (Louth, Sinn Fein)
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I appreciate that. What is the timeline on reaching the target of 800? Is there anything that could facilitate DAA if there are any issues? I imagine some of these people may be coming from abroad. Is Mr. Jacobs happy with security checks? Are we getting people through the process fast enough? Is he happy there are no hold ups?
Mr. Kenny Jacobs:
I am happy enough that it is going fine. Christmas went fine. I told the committee that 99% went through in 30 minutes or less, while 93% went through in less than 20 minutes. Christmas is really busy and is a small number of days but we managed that well so that gives me confidence that it is working. It is now down to hiring more people every week so that we get up to 800 for the summer peak.
Ruairi Ó Murchú (Louth, Sinn Fein)
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So Mr. Jacobs is happy enough that there are no logistical hold ups such as security checks from the point of view of the people being trained.
Mr. Kenny Jacobs:
I am happy enough with the people being trained. Are there people who go into the security team who would want to get housing? The answer is "Yes" if they are coming to Ireland. Does the vetting process take a bit longer? It does. This is something we just have to manage. All the learnings from last year have been applied so I am happy enough that we are focused on it and that comes down to fast recruitment, getting people into the role and retaining more people. We have already dealt with some of the bits that fell over last summer. It is a tough market in which to hire but it is down to a specific number. We want to make sure we recruit a specific number of people every week.
Ruairi Ó Murchú (Louth, Sinn Fein)
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DAA is like every other employer, particularly in this part of the world where accommodation and its cost present a difficulty. It is what it is.
Ruairi Ó Murchú (Louth, Sinn Fein)
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It is having an impact on every element. Does Mr. Jacobs think the target of 800 will be reached well before the summer?
Mr. Kenny Jacobs:
We do not want to reach it too quickly. We want to reach it in time for the peak of the summer, which is July and August. Every weekend is a big outbound event. We will be looking at St. Brigid's Day, St. Patrick's Day and the Easter peak. People will be heading away for the rugby internationals. It is a very predictable calendar regarding where the peaks are when people will be going through terminals 1 and 2 in Dublin.
That is up to us to manage. We will build up to the number of 800 we gave the Deputy for July and August and the real peak, when residents, that is, families and people living here, will be heading on their holidays.
Ruairi Ó Murchú (Louth, Sinn Fein)
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Mr. Jacobs is fairly sure that from his point of view, he has his house in order. As regards being impacted by dealing with caps across Europe and all the rest of it, does Mr. Jacobs foresee any major difficulties this summer?
Mr. Kenny Jacobs:
I do. I hope there are not difficulties in Ireland. I hope and expect there will not be difficulties in Dublin and Cork airports. As I stand back and look at European aviation, resilience will be a challenge next summer. French, Catalonian and German air traffic controls will have staffing issues. If they have staffing issues, things slow down. I expect, and everyone should expect, that it could be a challenging summer. We might stand back and look at Dublin Airport last summer and compare it to Schiphol, Manchester, Gatwick and those airlines that capped their traffic. People had to wait two and a half or three hours to go through security and significant swathes of people missed flights, which is totally unacceptable.
Ruairi Ó Murchú (Louth, Sinn Fein)
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It was disastrous.
Mr. Kenny Jacobs:
They would bite our hands off to get the performance we are giving at the moment. We should all expect that it is not going to be back to business as usual, however. Handlers in certain airports in certain countries are still suffering. Ryanair and Aer Lingus will perform well but I know of many other airlines and a lot of airports around Europe where I expect resilience will be a challenge. The thing I particularly want to call out, which I think the airlines have called out here, is that air traffic control, in particular French, the western part of Germany and Catalonian air traffic controls, can be something that causes delays in the systems. People might say that is something to do with the airport; it is nothing to do with the airport. We need to make sure everybody builds in resilience going forward.
Ruairi Ó Murchú (Louth, Sinn Fein)
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I suppose there has to be engagement to ensure these difficulties can be dealt with and yet they are beyond the DAA's or our remit.
I will go back to Christmas. Obviously, there was a particular issue and no-one is going to blame the DAA or anyone else for the weather we got. Initially, however, it was put on the airlines. Representatives from Aer Lingus appeared before the committee and said that at an operational level, the DAA accepted there were things that could have been done better and that there may have been set-aside areas, which need to be put in place into the future. Could Mr. Jacobs address that? Aer Lingus was obviously not overly happy that the DAA said it was not its fault, for want of a better term.
Beyond that, we are very interested that this does not happen again and that we have the best infrastructure or whatever is required because we will be dealing with cold weather into the future.
Mr. Kenny Jacobs:
That cold snap in December comes down to this. The one day on which there were issues was 9 December. I happened to be flying myself that morning. As the temperature was minus 4°C, it was a challenging morning for everybody. Our job in this system is to de-ice the taxiways and the runway. Aircraft de-icing is up to the individual airlines. We actually do not de-ice the aircraft.
Ruairi Ó Murchú (Louth, Sinn Fein)
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I know that. They accepted that but they also said that at an operational level, there was an acceptance that things could have been done better and that in certain airports there is almost a set-aside area. The idea was that there are logistical constraints within Dublin Airport at this point that need to be dealt with as regards de-icing.
Mr. Kenny Jacobs:
I do not accept that there are any logistical things that have moved around. On the specific morning I mentioned of 9 December, we had challenges around the aircraft where we got our crew together in the morning to get everything done. By lunchtime on 12 December, we were happy that everything was where we wanted it to be. Cancellations happened by airlines in the afternoon and into the evening. Any cancelled flights are an airline choice and that is up to the airlines.
Ruairi Ó Murchú (Louth, Sinn Fein)
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Does Mr. Jacobs think the DAA will be able to deal with this into the future?
Ruairi Ó Murchú (Louth, Sinn Fein)
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There is no major requirement for infrastructural change in this regard.
Ruairi Ó Murchú (Louth, Sinn Fein)
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Okay. Mr. Jacobs spoke about €1.9 billion for infrastructure as regards Dublin Airport. Mr. Michael O'Leary appeared in front of the committee and he was not necessarily receptive, or he certainly was not too supportive, with regard to the underground tunnel. Could Mr. Jacobs answer to that in respect of what is necessary, what needs to be prioritised and what DAA is prioritising, and even answer to what Mr. O'Leary said?
Mr. Kenny Jacobs:
I will answer to what he said. He is a very important customer who runs a great business. I think it is the best low-cost airline globally. Specifically on the tunnel, and I will ask Mr. Harrison to give the Deputy more detail, we think it is necessary. The regulator insists that the tunnel is necessary from a safety point of view and that is very important. We have got other airline customers that are in favour of the tunnel because it will bring efficiency to their operation. We listen to all customers. Ryanair is our biggest customer. We said the tunnel could cost up to €200 million in the context of a €1.9 billion capital programme. I will ask Mr. Harrison to add more colour to that.
Mr. Vincent Harrison:
In terms of the configuration of the airports, we have runways north and south now and we have a runway through the middle, which is referred to as crosswind runway. That runway has, and will have, parallel taxiways beside it. Vehicular access across two taxiways and a runway has essentially been ruled out as optional for safety reasons.
There is a whole variety of efficiency requirements in terms of access to the western part of our campus that the underpass will give us and we will be applying for planning permission. What we are talking about now is a project that has been approved for future remuneration, as opposed to one that is currently under construction.
Even coming back to the Deputy's question about infrastructure and availability, there are 23 parking stands on the western apron. Having those easily accessible, not just by cargo aircraft but by a range of other standby aircraft or aircraft that one might move to free up space, is critical for providing the resilience at the airport. This project is enabling access to those areas in a much more convenient way for processing of activities that will feed into longer-term growth projects. This is a 50-year asset. Therefore, when it comes back in terms of the actual impact on remuneration, it is quite small. It is quite a high-profile project, however. We have 159 capital projects that we presented through a regulatory process in consultation with our airlines. At the end of the process, 158 of those were allowed and brought forward. That is an indication of the degree of general endorsement there was for the programme across a whole wide range of stakeholders and regulators. Clearly, this is one that has been picked out for comment.
Gerry Horkan (Fianna Fail)
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I thank the witnesses very much. I will move on to our next contributor, Deputy Lowry, who has swapped speaking slots with Senator Craughwell.
Michael Lowry (Tipperary, Independent)
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I thank Senator Craughwell. I congratulate Mr. Jacobs on his appointment. Obviously, the DAA is hugely important to our country for economic growth and development. It needs leadership, commitment and innovation. I accept, as everyone does, that Dublin Airport performing well and efficiently is hugely important for the entire country, not just Dublin and the Leinster region.
Mr. Jacobs mad a very stark comment about the decision of CAR on pricing. He stated, "In its decision, the regulator has disallowed the recruitment of up to 240 of the security staff needed at Dublin Airport by 2026, which, in the context of [what happened last year] post-Covid, is ... unwise and inexplicable." Could he elaborate on that a bit more? As a committee, we have a role to play in finding the correct balance in terms of the DAA's recruitment. If we need to be in contact with CAR, then as a committee we should do it.
I was interested in a comment Mr. Jacobs made about how increased airport charges should not impact on the airline ticket price. I think all of us laypeople would say that if the charges are higher, it reflects in the ticket price. Can Mr. Jacobs tell us how he came to that conclusion?
Mr. Jacobs set out the reasons the secondary hub is hugely important to further development. He went on to say that the DAA has provided €1.9 billion of investment within its own budgetary parameters.
What is the total investment required to bring a secondary hub on stream, and where does DAA expect to get that funding from?
Could Ms Gubbins give us a general outline of the financial position of the DAA as it stands? What reserves has it? What investment planning has been done? For those who do not know, including me, could Ms Gubbins state where the revenue comes from principally? How is it structured? Ultimately, what is the current position of the DAA financially?
Mr. Kenny Jacobs:
There are four parts to that. At the start, I will talk about the correlation between the price cap and the price of an air ticket, and I will also deal with the point on security and the 240 staff needed. Mr. Harrison will answer the question on the secondary hub and Ms Gubbins will give an update on the financial aspects.
Simply put, having worked on the airline side and now being on the airport side, I know how airlines look at it. Last summer, for example, airfares from Dublin were up significantly, with a figure of 40% for all of Europe. Any one of our airline customers flying out of Dublin last year paid a much higher airfare. That is while prices were down. The price that the airlines paid went down and the price that the customers paid went up. There is no correlation at all, as I note from having been on the other side. We have no ambition to have the average EU airport price. I cannot name one airport across Europe that charges airlines an amount as low as we charge, and I have worked in the airline industry. No European capital is comparable. We have no ambition to be a Heathrow. Forget about its pricing and that of Paris Charles de Gaulle Airport. Capital city airports such as Lisbon, Madrid, Vienna and Rome are charging airlines significantly more, and always have. We do not want to get to the average EU price, and there is no correlation in respect of us putting up the price. We want to stay really low on price. If the price cap goes up, it does not mean the travelling public will pay higher airfares. I know that from having worked on the airline side. Airline fares go up and down based on supply and demand and the load factor the airlines want to achieve. Airlines can make more money and fares can go down in airports with higher prices than Dublin Airport. Therefore, there is no correlation, as I note from having worked on both sides of the fence.
On the point on security and the reference to the 240 staff needed, I draw the Deputy's attention to the period from 2023 to 2026. We are not against independent regulation and want a good relationship with the Commission for Aviation Regulation. We want its modelling process, specifically its inputs used, to be right. The commission has modelled that we will need 750 security staff at Dublin Airport between 2023 and 2026. Our modelling suggests we will need 1,000 in that three-year period. That is based on what we believe the airlines want to do and the number of people who will go through the terminals, namely, terminals 1 and 2. It is based on the C3 scanners we want to introduce at Dublin Airport, which will give passengers a better experience in that they will have to take less stuff out of their bags. Also, it is a question of building in resilience. Last summer was not a resilient summer for all in aviation. I have already said that there will be challenges this summer. Our job as a management team is to make sure those challenges do not exist at Dublin and Cork airports. However, to build in the resilience, we believe we will need 1,000 security staff from 2023 to 2026. The difference between the commission's figure, 750, and 1,000 is 250, or approximately the 240 mentioned.
Again, we are not against independent regulation and want to have a good relationship with the regulator. We will not agree on everything. We do not agree at the moment on what the price cap could be but it is a matter of what occurs if the price cap goes up. Again, it is really important to state we do not want to be at the average price of an EU capital city airport. We embrace having a low price because it is a good thing. That is not the case with everything in Ireland, but it will not result in airfares going up.
Mr. Harrison will talk about the secondary hub and Ms Gubbins will cover finances.
Mr. Vincent Harrison:
On airport charges, a typical customer who flies between Dublin and Heathrow, which is the second busiest air route in the world, pays Dublin Airport €8 this year for the privilege of using Dublin Airport and pays Heathrow £30 for the same service. Heathrow is a larger airport with greater economies of scale. Both elements are aggregated into the fare of the customer. That shows, at one extreme, the degree of price competitiveness we have in the offer, but clearly one has to factor in the destination airport.
On the hub, let me explain the types of facilities. Terminal 2 and all of the associated operation is where Aer Lingus and our other long-haul carriers operate and where the bulk of our transferring passengers change aircraft. We plan to build another pier perpendicular to pier 2, which is for parking aircraft, to greatly expand the apron area. The objective is to expand facilities like US pre-clearance and assorted other works. When we are talking about it as a project, we are talking about a range of projects, with the development of the area costing around €600 million. There is a quite considerable amount of relocation of existing facilities in the area, and therefore there may be associated projects, such as those concerning new cargo facilities after relocation.
There is quite a substantial investment. Not all of it happens within the four-year period that we are describing and that is in the determinations. Not all of it is within the €1.9 billion. It is all planned for completion during this decade.
Michael Lowry (Tipperary, Independent)
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Does the cost of €600 million rest with the DAA in its entirety, or are there contributors?
Mr. Vincent Harrison:
The DAA is entirely self-funding. Ms Gubbins can pick up on the point on revenue sources, which the Deputy asked about. We receive no contribution from anybody, the State included, in respect of our financing. Leaving aside for a second the international businesses, our two airports are reliant on aeronautical charges, which are what we impose on airlines for the services provided and which are passed on to passengers, and commercial activities. The latter entail revenue from a wide range of activities, from car parking and retail to concessions and food and beverages. The combination of these gives us the revenue stream. We have to meet our operating costs of doing business and make our investment from that revenue stream. Within Dublin, where the regulatory environment comes into play, all of these things are taken into account. Essentially, our commercial revenues and costs are forecasted forward and what we are allowed as an aviation charge is the residual. It is what the regulator determines would be sufficient for us to do business over the coming years. Our complaint about this relates to the degree of contingency resilience etc. factored in, because a range of assumptions is involved and a range of what the regulator referred to as building blocks. To put it simply, if you take a haircut on every one of those, you end up with a lot of hair lost by the time you aggregate it across our operating costs, investment programme, commercial revenues etc. That is why, as Mr. Jacobs has said, our ambition to have a highly competitive airport by reference to the airports with which we compete across Europe remains, but there is a lot of headroom considering that our price is still very competitive compared with average charges across Europe.
Michael Lowry (Tipperary, Independent)
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That is the reason I asked the question. It is a massive investment. From what Mr. Harrison is saying, it has to be funded from within DAA's own resources. What are the prospects of doing that?
Ms Catherine Gubbins:
Mr. Harrison has made an important point. The group is completely self-funding. One of key priorities is to protect our financial profile, maintain our credit rating and have a credible story when going to external markets, meaning we can continue to be able to borrow. The overall price cap and trajectory comprise a key component of our ability to engage with the rating agency and external investor community so they will have confidence in our ability to fund, borrow and invest in the capital programme over the coming years. As part of our engagement with the regulator, we highlighted significant concerns about how it approaches this and considers our ability to fund ourselves, particularly when we have come off the back of the Covid period, which really demonstrated the exposure of the aviation industry in general to significant pandemics and, obviously, the general economic cycle. We have made this point to the regulator historically.
As Mr. Harrison said, we feel that the regulator has left us too little margin to deal with potential risks that might be around the corner, particularly in the context of the general macroeconomic environment and increasing interest rates, for example. It is important that we are able to fund ourselves. Indeed, it is a priority for us and the challenge is to effect that as we move forward. Our concern in this regard is related to our concerns around the regulatory price cap.
Michael Lowry (Tipperary, Independent)
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It is very important that we take this up with the regulator. The development and expansion of the airport is obviously critical to our economic growth and development. The position held by the regulator is central to the ability of the DAA to raise funds and implement its development plans.
My final point is a mundane one. With all of this development and expansion, there will obviously be increased numbers going through the airport. At Christmas I went through the airport on two occasions and I have to say it was very competently run and there were no issues. However, one issue that stands out for everyone attending Dublin Airport at the moment is car parking and accommodation. Is the DAA taking that into account in its overall plan for this development? Car parking is a nightmare at the airport, as is accommodation.
Mr. Kenny Jacobs:
I will ask Mr. Harrison to give more colour on car parking shortly. There are still things that we want to fix at Dublin Airport. We want to improve car parking and taxis; we want fast-track to work all of the time and to be faster. We want to improve general standards, including toilets and seats in both T1 and T2, but particularly in T1. We want to have more seats there and we want it to be a pleasant experience. It needs to be really effective. People need to be able to get up to the terminal, through the door and through security in 20 minutes or less, be able to get a cup of coffee or a sandwich, get to their gate quickly and get a seat. That is for people travelling on their own but if people are with family and it is Good Friday, it is even more important. We have a long list of things that we want to constantly improve at the airport.
Car parking was a challenge last summer and Mr. Harrison will now outline our plans for making that a better part of our customer's experience when they come to the airport next summer.
Mr. Vincent Harrison:
Simply put, last summer a large quantum of car parking capacity had been taken out of the market. In fact, it had not been in the market for the last three years but we would be hopeful that this capacity will be in place next summer. In general, as we said in the opening statement, we support all modes of transport, particularly public transport, to the airport. It is important for members to be aware that within the planning system that we deal with, the supply of additional car parking facilities for the airport is not particularly favoured. It is difficult but we continue to make the case and to demonstrate that all modes of transport need to be catered for. Approximately one in four people who use the airport use a car park so all of the other transport provisions are equally important. As I said, however, we would be hopeful that there will be a greater number of car parking spaces within the capacity that is there for next summer.
Darren O'Rourke (Meath East, Sinn Fein)
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I thank the witnesses for being here. I am sorry I missed the opening statement but I was in the Dáil Chamber. We have heard a lot in recent times about the expansion of, and vision for, Dublin Airport. I want to focus on recent expansion and the DAA's approach to and delivery of it. I refer specifically to the north runway. I am the Sinn Féin spokesperson on transport but I am also a Deputy for the Meath East constituency, which verges on the airport. Lots of people obviously depend on and work in the airport. Our guests will be aware of the real frustration of communities when they woke up to the noise of aircraft that they were not expecting - and reasonably not expecting. A lot of the time when we have these conversations people ask what those who live beside an airport expect but I have spoken to many people in St. Margaret's, the north County Dublin area and the east Meath area who had done due diligence on this. They had looked at the planning application, checked flight paths and understood that they would not be affected but now find themselves absolutely affected. We raised this with the DAA and received an acknowledgement in relation to it. We were told that new Standard Instrument Departure, SID, routes will come into effect from 23 February next. I ask the witnesses to confirm that this means new flight paths will operate from 23 February. The communities are asking me what this means, what those flight paths will look like, how they will be affected, why they do not know yet and why they have not been engaged with. They are also asking what assessments of buildings have taken place. I raise this on the basis of the fact that homes and buildings were insulated that are not currently affected by the flight paths but other homes and buildings, including school buildings, have not been insulated and are affected by the flight paths. It seems like an unmerciful cock up, to be honest. I ask our guests to outline what is happening on 23 February, what households, businesses and schools will be affected and how they are going to be engaged with.
Mr. Kenny Jacobs:
I will ask Ms Gubbins to provide more detail in a moment but we are very keenly aware of the issues related to the flight paths. Immediately when we found out about this we engaged with the regulatory bodies involved and with the local communities, which is something we do on a regular basis. Regarding the north runway, over the past year we have engaged with the local community 41 times. We take this very seriously and it will change, as the Deputy has said, on 23 February. Ms Gubbins will now give more detail on that.
Ms Catherine Gubbins:
Again, I want to acknowledge that it was a very unexpected development once the north runway went operational on 22 August. We started to engage with both the regulatory authorities and our neighbours immediately we became aware of this issue. To provide some context, the determination of a flight path off a new runway is an incredibly complex and highly regulated process. Back in 2016 we would have engaged with the various regulatory authorities when we were trying to do our modelling around understanding the potential impact of the new runway on our neighbours. At that point in time we would have had an understanding that the interpretation of the International Civil Aviation Organization, ICAO, safety direction would have resulted in aircraft having to fly one nautical mile after take-off and then banking right. All of our modelling, as we engaged with regulators at that time, was based on that.
Moving forward, six years later when the runway was about to become operational, the regulatory authorities at that point in time had to stand back and actually develop the flight path for the runway. That was not a process that we were necessarily involved in. Once it came to determining the relevant flight paths, changes were made to some of the criteria that were applied and in simple terms, this meant that aircraft had to reach a certain height rather than travel a specified distance before they could turn right. That is what gave rise to the deviation in the flight path that materialised at the time. It was a surprise to us and we began our engagement with the regulatory authorities immediately. As I said, this is a complex and highly regulated process and unfortunately, it has required a significant amount of engagement with the Air Navigation Service Provider, ANSP, the Safety Regulation Division, SRD, and the Irish Aviation Authority, IAA. A lot of work needs to happen to make sure that the ultimate flight path is promulgated and uploaded to the various aircraft and pilots who use the airport. It is a very complex and time-consuming process, unfortunately. We started that process immediately and it has been ongoing. We have been intensively engaged with all of the relevant authorities to try to get this resolved as quickly as possibly. Thankfully, we are now in a position to communicate to our neighbours that on 23 February the flight path should revert to something that is more closely aligned with what we would have originally modelled.
Darren O'Rourke (Meath East, Sinn Fein)
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Is Ms Gubbins referring to the 2016 modelling?
Darren O'Rourke (Meath East, Sinn Fein)
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When will residents get to see those?
Darren O'Rourke (Meath East, Sinn Fein)
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In terms of the assessment of the impact and insulating affected properties, when will that happen?
Ms Catherine Gubbins:
That will be ongoing from now. It is something we have been considering, clearly, as we worked with the authorities to try to realign the flight paths to what had originally been anticipated. We had been considering the potential impact. As we understand that, and as it becomes clearer over the next while, we will be considering what mitigation measures can be made available to any houses that are impacted, where that had not been previously advertised to them.
Darren O'Rourke (Meath East, Sinn Fein)
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Ms Gubbins has set it out there, but it raises the question about how a scenario like this arises. Where does the fault lie? Is it with the DAA or is it with the regulators? If it was not with the DAA, I would presume there are costs associated with this.
Ms Catherine Gubbins:
I would say that it is not with either party directly. We had engagement in 2016 to understand the inputs required with regard to modelling, which was for a specific purpose. As I said, six years later the regulatory authorities were trying to determine the actual flight paths. It probably fell between two stools given the passage of time. From our perspective that is-----
Darren O'Rourke (Meath East, Sinn Fein)
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From another perspective one could say that the exercise the DAA engaged in at the outset was a complete waste of time given that it was a completely different model. Who has due diligence? Is it the DAA in identifying that those criteria might have changed, which is fair enough, or is it for the regulators to say that what was submitted is out of date?
Darren O'Rourke (Meath East, Sinn Fein)
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There are two things, including the insulation of properties. The DAA has insulated a lot of properties for noise insulation. Does Ms Gubbins have an assessment of how many were insulated that, had the right model been applied, would not have needed insulating? Over what period does Ms Gubbins believe there would be an assessment of what properties will now need insulating and anything else that goes with it?
Ms Catherine Gubbins:
In general, our approach to the insulation and other sound proofing for the houses impacted, has been to do more rather than less. We have insulated some 150 houses. The total number of houses that we have committed to insulating is 200. I believe 150 of those have been done already. In general, we have gone over and above requirements that were placed on us under the planning permission that was in place. We do not regard houses as having been insulated unnecessarily, to be honest. On the basis that we are trying to go back to the original flight path, I do not believe it is an issue per se. Over the next period we are trying to understand if there are houses that are now going to be impacted that we had not previously assessed. We will certainly consider what mitigation measures we can make available to those houses.
Darren O'Rourke (Meath East, Sinn Fein)
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There was an application in 2007. Ms Gubbins is referencing 2016. I am aware Fingal County Council has issued an enforcement notice. I wonder about the basis on which the DAA is operating now and the basis on which it will operate on 23 February in the context of planning and the regulator. Will the applications have been adequately through those processes or does the DAA need to seek retention? Are other enforcement notices expected? Is the DAA of the opinion that from 23 February it will be entirely sound to operate those flight paths with regard to the regulators and the Aircraft Noise Competent Authority, ANCA, and all the various parameters that one must live within?
Ms Catherine Gubbins:
There are two separate issues at play here. The Deputy referred to the deviation in the flight path. That specific issue will, hopefully, be resolved on 23 February, as we have discussed. The actual flight paths, whether they are the deviated or the original, are not a factor of our planning permission. The Deputy referred to the 2007 application. The north runway was constructed under a planning permission that was granted in 2007. The Deputy is absolutely right that we are currently engaged in a process, which the noise regulator ANCA, has made a decision on. This has been appealed to An Bord Pleanála. We are actually in the process of engagement around separate conditions to do with that 2007 planning permission, which to our mind is a completely separate process to the flight path deviation issue that we had previously discussed. As of 23 February, we are very hopeful that the new flight path will be in place, and hopefully that issue will be resolved. We are in the middle of a statutory process, which absolutely needs to run its course over the next few months.
Darren O'Rourke (Meath East, Sinn Fein)
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Picking up from that point, I presume that in its assessment the DAA has been advised on this. The community might reasonably ask if the 2007 planning permission is being contested but the runway is being operated at the same time, whether the DAA is of the opinion that it is operating the north runway on a sound basis, despite the fact there are ongoing legals in relation to that planning?
Darren O'Rourke (Meath East, Sinn Fein)
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It will only be on the outcome of this that it will give an indication that DAA needs to do X, Y, or Z.
Darren O'Rourke (Meath East, Sinn Fein)
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I thank Ms Gubbins.
Gerry Horkan (Fianna Fail)
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For my own benefit, can I just confirm that the DAA is operating the north runway on the basis of the existing planning permission as opposed to what the DAA would like the planning permission to be into the future? Yes.
Gerard Craughwell (Independent)
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I congratulate Mr. Jacobs on his appointment. He has a tough role ahead of him, I would think.
At the outset, I have used Dublin Airport quite a lot since the airport has opened up. I will take this opportunity to compliment the staff who work under Mr. Jacobs, particularly those who work at the coalface in security and the like. I have never yet met one who was bad humoured, albeit they were under severe pressure. It is a mark of the type of people the DAA employs that they are able to cope with such a swell of people from time to time. I congratulate all involved out in Dublin Airport.
I now want to talk about the issue of car parking. As far as I am aware, the DAA operates the red, green, blue and two short-term car parks, one each at T1 and T2. I have to say that I see them as the greatest rip-off that ever existed in this country with the costs of parking at Dublin Airport. The charges there are absolutely outrageous for people travelling out of the country. One in four passengers travelling through Dublin Airport is parking their car there. This is down to the policy of this country that we have not put in place proper infrastructure to be able to get to the airport. I compliment all of the different bus companies that now are feeding passengers into the airport, which I hope improves things. There are two things in my mind, one of which is that Dublin Airport is self-funding. Is it charging the enormous car parking charges to fund something else? My second issue is I am aware that the former QuickPark recently went up for tender. I understand - perhaps the witnesses will confirm for me - that the DAA has won the competition to purchase. Why in God's name would the DAA want to buy another car park? I thought it was into competition. Ryanair brought us from the situation where nobody could afford to fly to everybody now being able to afford to fly. It is now like jumping on a bus. Why would the DAA want to own all of the car parks? Would the witnesses care to address this first please?
Mr. Kenny Jacobs:
I will ask Mr. Harrison to talk about the car parking. I thank the Senator for welcoming me into my new role. I love his comment about the staff at security. I was a big fan of going through Dublin Airport security when I worked for an airline. It was always really great. There are great people there whoi make it a seamless process. From the issues at the end of May last year up until now, and Christmas, and everything that happened, it is testament to the character they have and the pride they have in the role. They are the people who make it happen. It is a great team. They worked really hard. It is a team we want to grow and make airport security something that is nearly always seamless. There will always be a Good Friday or an Easter Saturday morning, and it is just difficult when one has that big an operation. It is an absolutely great team. They are the ones who make it happen.
I will now hand over to Mr. Harrison to talk about the car parking, how it works, what we would like to do to make it a good service, how it compares to prices for downtown parking in Dublin, and how short-term car parking is very different from long-term car parking which people use when they are heading away on their holidays, and how this ties in with people coming up from wider Leinster who will use the longer term car parks to get to the terminal.
Mr. Vincent Harrison:
Yes. Dublin Airport provides approximately 26,000 car parking spaces split between short term and long term. In technical terms, our products are yield-managed so essentially the demand determines the price at particular times of the year. Prices are lower or higher depending on demand. Typically the type of length of stay that one might have in a short-term car park which obviously has the convenience of being next to the terminals, might be one, two, three days - a lot of short trips, business trips, etc - and people will be familiar with the longer-term car parks being typically for longer stays and having a bus provision. There is a range of choice. The colour schemes that have been quoted have different service levels or are closer or further from the terminals and there are quite different pricing regimes. There is already competition essentially within the car park structure or choice for consumers. For the last number of years, the car park that was referred to, previously operated by QuickPark, has not been in operation and that car park was publicly made available for sale earlier this year. Among discussions we had during the summer, the shortage of car parking spaces available at the airport and the consequent impact on pricing was mentioned. At the time and in other fora, we explained, for example, that our system for the long-term car parking pricing on a per-day rate established a cap of €15 per day. I can 100% guarantee for the limited number of hours I have parked my car in a local car park here, I will pay more for that for my presence here at this meeting that one would do for an overnight 24 hour stay at Dublin Airport. When that car park became available for sale, we expressed our interest and we are in a process. We do not own the car park as yet but would be optimistic or hopeful that in consultation with stakeholders including regulatory stakeholders and on completion of contractual terms, that we would hopefully be in a position to provide that extra car parking capability to the public for next summer if it transpires that we are in a position to complete that sale.
Gerard Craughwell (Independent)
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I am going to declare my hand here. When I heard that the Dublin Airport Authority, DAA, was in the competition I was rather surprised. Then when I heard that it had won the competition I was even more surprised. I have asked the Competition and Consumer Protection Commission to look into this. I do not believe it is right that the DAA should have all the car parking within the confines of Dublin Airport. I believe the sale is conditional on the Competition and Consumer Protection Commission approving it. That is a process which could go in any direction and take any length of time as the regulatory authorities seek to ensure the public's interest is protected. Is there a contingency plan in place if this does not go right or is there a lessor that would take it on from the Dublin Airport Authority to run and manage? QuickPark has been locked up for a long time now so opening it up is going to take time and a lot of planning. If things go askew, has the DAA a contingency plan in place?
Mr. Vincent Harrison:
First, for all the reasons the Senator has called out there, it would be preferable that these processes be completed quickly and smoothly. Clearly the authority that the Senator mentioned is among the stakeholders with which we are actively and proactively engaging. We considered a whole variety of contingency measures last year when it was apparent that there was not sufficient availability of capacity including discussions as to whether we could indeed lease that car park short-term. That was not made available to us and did not come to fruition. We also engaged with the Department to see whether we could achieve fast-track emergency provision to enable us to expand car parking into other temporary areas. Again, that was not considered to be capable of being provided by the Department and the Minister. There are a whole range of ways we sought to make available more capacity. We engaged in extensive promotion of alternative routes to the airport such as the use of public transport. We have engaged with the Department of Transport again regarding bus provision because one of the things that has happened with the return of public transport is that while in the middle of the day many of the services have returned, in the early hours and at night time when either our staff are looking to access the airport for early starts or indeed many of the passengers are coming for early morning flights, that type of capacity has not been properly restored yet in the public transport system. There are indeed a range of contingencies which we have sought and will continue to seek but they are not all entirely within our gift. Clearly, we are absolutely anxious and we made this our number one priority to say that if there is available existing capacity, rather than leaving it closed and shuttered, we are interested in making it available to passengers.
Gerard Craughwell (Independent)
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On the contingency side of things, if this committee can be of assistance, I ask Mr. Harrison to make any submission he feels is necessary. My interest is not to support the private sector or any sector but to get competition for the end user, the consumer. I felt that having all the car parking space just did not stack up right. If I am correct, five or six entities expressed an interest in QuickPark and, if I am right, the DAA was actually the lowest bidder, which has, as I understand, annoyed quite a number of the other entities. They thought there was a second round coming that has not come along. That is between the vendors and the bidders themselves.
Gerry Horkan (Fianna Fail)
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We might just be careful in the questioning.
Gerard Craughwell (Independent)
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I am not suggesting anything-----
Ms Catherine Gubbins:
To respond to the Senator's original point to Mr. Harrison, our primary priority here is that the car parking space is available. Back to the original point around the commercial revenues that we generate, simplistically with regard to our overall regulatory model which we have discussed, all of that incremental commercial revenue is ultimately taken into account to reduce the price cap. This is not an opportunity for us to make incremental revenue. Ultimately, it is all taken into account.
Gerard Craughwell (Independent)
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Ms Gubbins would accept that if the DAA had a monopoly it could.
Gerry Horkan (Fianna Fail)
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Not to its ultimate benefit.
Gerard Craughwell (Independent)
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I thank the witnesses for their candour. I appreciate it.
Gerry Horkan (Fianna Fail)
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Is it fair to say the more places the DAA has, when talking about demand pricing, that the average price should fall?
Mr. Kenny Jacobs:
That is our intention. We do not want people this summer to have the issue of getting parking. We do not want anyone to have an issue in their heads about whether or not they are going to have an issue at security. We want to take these things off the table. It is supply and demand. If there is more capacity in the system, notwithstanding everything Senator Craughwell has said, regardless of who owns it, if there is more supply the price should come down. Taking a longer-term view as we have said in our statement, we want metro north and BusConnects to work. We have a space reserved between terminal 1 and terminal 2 short-term car parks near the church at the airport and that is where we would want the station to be. We want that to happen too in the longer timeframe so that there are better public transport options to go to the airport for those coming up from Laois, Kildare, and from all parts of the country to fly from Dublin. People need to know they can go on a big holiday and stay in a long-term car park and if they are going tomorrow on a short-term business trip they can get a short-term space. Supply and demand will determine the price but we want to put in the service.
Gerard Craughwell (Independent)
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Just very quickly, this is not just metro north; there are also people advocating for a spur from Swords.
Gerry Horkan (Fianna Fail)
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I will let somebody else maybe take that point up because the Senator has concluded with his point.
Gerard Craughwell (Independent)
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I am just wondering if two stations could be accommodated.
Gerry Horkan (Fianna Fail)
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Senator Dooley is next.
Timmy Dooley (Fianna Fail)
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Like others, I welcome Mr. Jacobs, Mr. Harrison and Ms Gubbins and thank them for being with us. Their predecessors have been here in the past and I think they might have been here with Ryanair previously or certainly some of their representatives were.
Their insight into the aviation sector will be helpful to the overall mix.
Before I begin my questions, I will carry on from Senator Craughwell's point. Will the DAA confirm that there was no requirement for the site which it is at an advanced stage of negotiations to purchase to remain a car park? Could it be the case that if it had not been secured by DAA that it might not have ended up as a long-term car park? It is a valuable site in north County Dublin. Will DAA clarify that?
I will move on to areas that are of interest to me. Unfortunately, I use Dublin Airport more than I would like. I would prefer to be able to do more from Shannon Airport but I will get into that later. There are two issues for users of the airport. It is poor infrastructurally. Terminal 2 in particular provides a poorer user experience at security than it should. Has DAA had any outside expert come to look at the system for the passage of people through security? For an airport that opened in 2010 it is a poor offering in comparison to what is available in older airports around the world. Even the simple matter of the basket coming back is an issue. It must be pushed back many times. It gets stuck and does not get back, whereas in terminal 1 there is an automated system. The witnesses use the airport regularly so will be familiar with it. In comparison to other airports - Mr. Jacobs compared it to other capitals - and I am not talking about the best, but the average, it is a poor user experience. Mr. Jacobs spoke about cleanliness and is aware of those issues. They need to be addressed in time.
Mr. Jacobs identified one of the upgrade projects, namely a further pier. The user experience of travelling into terminal 2 late at night is of landing at gates that are closer to terminal 1 and having to taxi all the way back to terminal 2. It is not great in the morning or evening, which is when most people who are regular users of the airport travel. Will the DAA speak about its plans to improve the user experience in the airport and what studies have been done of a better use of the space in security? Mr. Jacobs spoke about staffing, which is important, and about the new system which is similar to the ones introduced in Kerry and Shannon airports. We know the complexities of that. Will he speak about time and motion studies, if any has been done, and the user experience going through the airport as it is a major problem?
Many people suggest that with the second runway Dublin Airport terminals are close to capacity. A little more could be done with some new gates that would help the user experience but it is getting close to capacity.
DAA spoke about competition earlier. There were other views at the time about the separation of Shannon Airport from Cork and Dublin airports. I did not agree with it but it happened. Is there an argument for building a closer alliance between the three main airports in the State in Cork, Dublin and Shannon, under some kind of a broad umbrella similar to the Córas Iompair Éireann, CIE model with three entities somewhat in competition but not really? Dublin Airport does not have any competition in reality. Perhaps it has with airports in London or Portugal but there is no competition in the State.
The purpose of the committee inviting DAA to appear is to feed into its development of a future strategy for aviation. We will hit it with the little bits and pieces within its remit. Notwithstanding that the three airports are regulated into these separate entities and the regulator technically addresses the competitive environment, is there an overarching argument for us to all be working more closely together to better maximise what we get through in an easier way?
Without getting into major detail, there is very little cargo that could not go through Shannon Airport. Cargo in the belly hold of passenger aircraft could not but direct cargo flights could.
Is there any reason for Dublin Airport to be in the space of transit business where the passengers do not get on and off the aircraft that DAA still bids for and fights for? It would declutter a busy airport. That business could make a difference to Shannon Airport. Shannon Airport is losing out significantly because of the amount that Dublin and Cork airports have together. I would be interested to hear the witnesses thoughts on those issues.
Mr. Kenny Jacobs:
I thank the Senator. I have identified four issues. I will answer the first matter he asked about the condition of the site and I will ask Mr. Harrison to respond to the questions on cargo and capacity. I will take the committee through some of the things DAA wants to do on the experience the passenger has going through Dublin Airport. I will speak about the security piece and time and motion studies.
On competition, I agree Ireland needs a broader national aviation policy which should cover Dublin, the regions, regulation, who is involved, growth, sustainability and all those key matters. Everyone should want that in so that we can stand back and say what kind of aviation we want. We are great at it. We have great airlines, airports and heritage and play an incredible role in the leasing industry in the world and everyone should be proud. The Irish lead. Our middle eastern business partners say that the Irish are the best at this in the world. That is great. We must have a national aviation policy on the island.
Speaking on behalf of the DAA and having worked on the airline side, competition is great and it is needed. The competition is between the regions. I am from Cork. I am based in Cork Airport. I have often used Shannon Airport in the past. The competition is between the regional airports in Cork, Shannon, Knock and Kerry. They have always competed and it is a good healthy competition. The big international hubs are Dublin Airport's competition. An airline does not look at a route such as Dublin to Lanzarote and ask whether it will move it to Cork or Shannon. Those routes will be added if they make sense and if the load factor and the right economic return the airline wants is available. Airlines do not consider whether to put the route in Dublin or in other places. They will consider a good bit of healthy competition between Cork, Shannon, Kerry and Knock airports and they will do what they do as airlines. That is a question for them. Competition is a good thing. We want healthy competition. It happens at a regional level for the airlines and then consider the big international hubs.
Timmy Dooley (Fianna Fail)
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Does Mr. Jacobs not accept that having Dublin Airport as the parent, gives Cork Airport an unfair advantage?
Timmy Dooley (Fianna Fail)
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I would not expect him to.
Timmy Dooley (Fianna Fail)
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I want Cork Airport to work as well. I have family in Cork and we all want to see the regions work. However, Shannon Airport is being starved to some extent. Notwithstanding the wonderful work that Mary Considine and her team are doing there, it is always against a backdrop that a relatively small amount of the kind of business I talked about - the transit and cargo - would make such a difference to that airport. It is not only about the airport. It is also about the community it serves and the employment it retains in the region.
Timmy Dooley (Fianna Fail)
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From the perspective of Dublin Airport, would Mr. Jacobs be averse to accepting in a new paradigm that the bulk of cargo should be directed through a regional airport, other than that which would operate in the belly of-----
Timmy Dooley (Fianna Fail)
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For transit business where no one gets on or off, would Dublin Airport be prepared to lose that or allow it to go to another airport?
Timmy Dooley (Fianna Fail)
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I am not talking about hubs. I mean when it is only a technical stop, landing for refueling. Is there any need for that to go through Dublin Airport?
Mr. Kenny Jacobs:
I will ask Mr. Harrison to cover that and touch on cargo and capacity. However, broadly speaking from an all-of-Ireland point of view, Dublin Airport is competing with the international hubs. The regional airports, which are all important, are competing with each other and long live both competitions.
I will touch on Dublin Airport and then Mr. Harrison will take the other point. Things need to improve. I look at terminal1 and terminal2. I go there every morning to see how the first wave is going. I cannot think of a European airport I have not gone through. I have many views on what works well and what does not. terminal1 is an old building. It is where the Ryanair flights leave from. It gets narrow in parts. I know what the key things are that need to work at an airport, such as parking and getting through security quickly. I do not want entering terminal 1 to be an anxious moment with passengers unable to see security wondering if there will be a big group of people. We want passengers to get through security in 20 minutes or less. We then want them to be able to walk to the piers, get everything they are looking for including clean toilets and for everything to be working.
We want clean terminals. We will do a bit of decluttering because if someone flies from T1 or T2 at this time of day, it will be a great experience. On Good Friday morning on an early morning flight to Lanzarote, it is a totally different thing. It is setting ourselves up for those big 20 outbound days that are cup final days for us where we are at our best. It is the constant grind of cleaning, staffing and security and making sure that it is a really efficient operation and ensuring that the right food and beverage options are there for our customers. We want to add more seats in T1 because we need them on those big mornings like Good Friday. There are plenty of things that we want to look at in T2 as well.
Regarding security, we are always doing time and motion studies to see what is the best way to do it. I have gone through nearly every European airport and you see security done well and done in different ways. We have to constantly be on the lookout for new technology that helps. The C3 scanners, for example, are good because people have to take fewer items out of their bags and that takes a bit of the stress away. They require more staff and more point of view and the footprint that they require is slightly different. The automatic tray return that was mentioned is another good thing that helps the process. Staffing levels and what the staff say to people as they are doing what we call divestment, which is taking stuff out of their bags, until we have the C3 scanners is very important. We have added a supervisor role in this past year. These are our most experienced security people who have worked the lanes who know what good looks like. They are the ones who marshal the process through. It really is about the early morning peak that we want to get right and having visible leadership there is very useful. They are great people and they perform an important role.
We are always looking at other airports and what is the best way to do it. In some ways, it is easier to do things in T2 because it has more space and more of the traffic goes through to T1 and we want the two products not to be totally dissimilar, because many passengers will use both terminals in a given year so we want them to be aligned. Like anything, it is into the constant grind of making sure that every single day is up to standard. There are bad days and we will have bad days next summer. Every airline will have bad days. It is about how quickly we can recover and improve that. We look at the technology to find the best to invest in so that we can make it a better process within the infrastructure we have. I will ask Mr. Harrison to address the point on cargo and the transit structure.
Mr. Vincent Harrison:
In relation to the car park site, it was available for sale as piece of land so there was no restriction on usage. Clearly, if the DAA acquires it, we intend to make it available or to retain it available for car parking.
In relation to cargo, perhaps unusually from a DAA point of view, Senator Dooley is facing two people from Limerick and one from Cork so we are pretty familiar with the regional context.
Timmy Dooley (Fianna Fail)
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That is my point. The witnesses had to come to Dublin for a job. I am trying to make it easier for the next wave but that does not happen.
Mr. Vincent Harrison:
The Senator referred to forcing people to use a service or directing them. Nobody directs a user to Dublin airport. We have no contract with any airline to provide a service beyond today. If they are operating it they can choose to withdraw the service at any point in time if the economics of the route do not stack up. It is the most mobile customer that one could have. We are probably akin to a hotel. We are open, people can come and stay if they wish but we cannot keep people.
Timmy Dooley (Fianna Fail)
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I know but the critical mass and the dominance always draw more. I am trying to be helpful from an overall perspective. We are trying to look at policy generally and trying to take a slightly different direction in an effort to secure the future of the regions and recognising that the population is growing. To do that, we have to intervene. Maybe my language, in terms of "forcing", was a bit over the top but the point I am making is we have got to sow some seeds that takes us in a different direction.
Mr. Vincent Harrison:
This is where thinking through these in a policy context is important. For example, transit operations typically operate at an airport where they have other activities so that they can leverage the use of the same resources because by definition, that airline can choose to conduct that activity in multiple places. They will typically choose where they are already doing work and have a team. If that moves to somewhere else it may be completely outside of the country. Cargo operations tend to be located where the cargo is and the activity is so clearly, the economies of scale of Dublin are what one is competing with here as opposed to the economies of scale of Dublin Airport. Any other area or region in the country that makes itself attractive for that business has the opportunity to bid for it. In a highly competitive industry, we need to move away from any sense of directing things, because we may end up directing them out of the country completely, as opposed to within the country.
Joe Carey (Clare, Fine Gael)
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I welcome the witnesses here. I congratulate Mr. Jacobs on his appointment and wish him well in it. As a committee, we are trying to have a say in the framework of aviation policy. As well as today's witnesses, we have met representatives from Ryanair and Aer Lingus. Members of the committee travelled to Holland and looked at Amsterdam Schiphol Airport and Rotterdam. Our point is that we have a very unbalanced national aviation cake and we are trying to address that problem. There are opportunities for both Dublin and other airports within that. The absolute dominance of Dublin is the issue. More than 90% of all passenger traffic goes in through Dublin. That has a knock-on impact. Dublin is overheating with huge pressure on housing, schools and infrastructure. We are trying to see if this could be done differently. There is plenty of spare capacity in other airports including in Cork and Shannon. There is an opportunity there. Senator Dooley touched on the point of trying to work together as a country. The DAA is a semi-state agency. What is in the best interests of the country? Is it healthy to have 93% of all air traffic going in to Dublin and the impact of that? Many people from Clare are being pulled to Dublin to fly out, bypassing Shannon Airport. Even when the Ryder Cup was announced for Adare Manor a number of years ago, the first thing done by Dublin was to welcome it and tell people they could fly in through the local airport in Dublin. There is constant aggressive marketing, whether it is on local radio or in the newspapers in the west of Ireland encouraging people to go to Dublin to fly. Notwithstanding that, we undoubtedly need a really well-run airport in our capital city. For me and for many other people, however, the mask slipped regarding Dublin and the pressure that is there, for example, with large amounts of people queueing out in the rain. We had several hearings here about the issue. It really became apparent how many people are travelling through Dublin and the airport's ability to cope with that. It is timely that we are having these hearing because this aviation policy is being reviewed. What is the witnesses' idea of aviation policy? Do they want Dublin to grow even more? There were 33 million passengers in 2019. Does the DAA want to double that or go even bigger? What does it want to do? Does the DAA have any regard for the rest of our country's airports and the role they have to play?
Mr. Kenny Jacobs:
I thank the Deputy for those questions; there is a lot there. We absolutely need a national aviation policy. Every airport and every airline would say we need one. We have not had one for a while and there should be lots of inputs into the conversation. That conversation should touch on connectivity into Ireland and into the regions and what we want it to look at. It should cover resilience.
That is something that would not have been included in the past. Learning from Covid and the economic situation needs to cover resilience. No airports have had the issues we have had. We have said mea culpa. We have worked to improve it and we have improved it. We will never take anything for granted and we will never be complacent when it comes to the operating standards at our airports going forward. Policy needs to cover sustainability in a way it would not have covered it in the past. I am highlighting the key things that need to be included. It needs to allow us to attract airlines so that they want to fly here, and it needs to cover infrastructure. It is Dublin Airport versus the big hubs, as I have said. From an airline point of view, I know airlines do not just say they will move the Dublin-Chania route or the Dublin-Malaga route to Cork or Shannon instead, for example, and people will do it. Airline economics work on the basis of whether planes can be filled and whether the company can get the fare it wants. Airlines will look at that when considering moving a route between Cork and Shannon or between Kerry and Knock. That is the way it works in the regions.
There is a lot of competition and we welcome that. There is competition between the regional airports, and Dublin is competing with the hubs. As Mr. Harrison said, there are two people from Limerick and one person from Cork here, so we get it. Many people ask whether there is an imbalance in everything and if there is a Dublin bias. It is a reality when it comes to airports. As Mr. Harrison said, the airport is like a hotel. The airlines decide where they want to fly from and whether they want to use Dublin Airport, Cork Airport or any airport around the country. That question is one for them. Our job is to remain highly competitive on price, to provide a good service to the airline customers who come through and to give a good service to the passengers who use the airport. A liberalised and openly competitive market is what we need. I do not believe there is an imbalance. We want to keep an open market. The regions will compete with each other, but Dublin Airport is a different thing. It is competing with other airports like Schiphol, as was mentioned. Rotterdam The Hague Airport is different. It is more like Cork Airport. We would love to be in healthy competition. Dublin will do many things in the years ahead better the Schiphol Airport does. We would love the connectivity that Schiphol has to downtown Amsterdam. Passengers can land there and, while they might have a long walk to get through immigration, they can then just take public transport to downtown Amsterdam. That is something we do not have. We need to look at those things in the wider system.
On the question of aggressive marketing by Dublin Airport, I did not hear or see any of that. Generally, airports do not need to do too much marketing. However, I will ask Mr. Harrison to-----
Timmy Dooley (Fianna Fail)
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Steady on. Mr. Jacobs should go to his marketing department.
Timmy Dooley (Fianna Fail)
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I might be giving him ideas.
Timmy Dooley (Fianna Fail)
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He is off to a good start.
Mr. Vincent Harrison:
Mr. Jacobs has covered a number points from a policy point of view. Coming back to the question about capacity that was raised, within our regulatory system there is very much a just-in-time model for remuneration. There is a prize in saying that you do not have capacity in any time ahead of when you need it. In fact, you are penalised for it. A classic example of that is that ten years after terminal 2 was opened, the last one third of it was remunerated for the first time, because according to the decision of the regulator at the time, terminal 2 was too big. When we look at airport infrastructure, there are many different components and it is a bit of a jigsaw. A runway adds runway capacity but it does not add terminal capacity. Our job is to keep providing the infrastructure in anticipation of the demand of the economy, the public, tourism etc. The question has not been raised at a policy level for any of our airports as to whether we should have more capacity than we need today but enough to enable us to be comfortable for the next ten years, or whether we should have just enough capacity that we might need ten years from now, which is where we are at at the moment.
Joe Carey (Clare, Fine Gael)
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Is the airport's capacity defined at the moment? What is the capacity?
Mr. Vincent Harrison:
It is very difficult to define capacity in any single block because of all the different components. We can be over the capacity requirement in some areas and constrained in others, which becomes the limiting factor. Until we built the runway, our limiting factor was the number of aircraft that could take off, particularly at peak times in the day. That issue is resolved, but it creates a different bottleneck and a different sizing of capacity. It is not a straightforward answer, and in a policy context we can approach it in a much more complex way.
Just to provide members with the context, we are very proud to serve the whole island of Ireland. More people visit Northern Ireland from outside of the UK through Dublin Airport than through any of the local airports. That is because we have the long-haul connectivity to destinations around the world that make us a much more attractive option than transferring, for example, through Heathrow. In respect of the residents who use Dublin Airport, it might surprise people to learn that 70% of our business comes from people who live in Leinster. We are fulfilling the needs of the core catchment and we are fulfilling the need of a capital city airport for the rest of the country. People can get a direct flight from Ireland, an island of 6.5 million people, to somewhere like Dubai or Hong Kong. One would not expect to get that from multiple destinations in a country like ours. We are proud and will promote and make people aware of our route network. If that comes across as aggressive marketing, it is not our intention, but it certainly creates awareness of the services that are available.
In the context of the discussions we have had before about mobility it is important that advertise to people how to get to Dublin Airport. I know there have been comments made about promoting bus services from parts of the country to the airport. One of the ways we can stop people from driving cars is by creating awareness and usage of the bus services. We do not necessarily apologise for any of that type of promotion and awareness. As I said, we are operating with a core catchment and a reach into the rest of the country, which increasingly is for the sorts of services that are only available in the capital city airport. We wish every airport, including Cork Airport, well in building its regional structure from its own catchment.
James O'Connor (Cork East, Fianna Fail)
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I wish Senator Horkan well in his role as Acting Chairman. I congratulate Mr. Jacobs on his appointment and wish him well. To start with a few positives, it is great to see the new runway in Dublin Airport operating. It will have a significant impact and it is a positive development. We are very happy with the new runway in Cork Airport as well. I know that Niall McCarthy and the gang there have been doing a superb job. They have been excellent. The service provided at the airport has also been very good. It is good to see, even from a demand point of view, the strength of the recovery in the numbers in Cork Airport, which is very significant. That is not to be missed. It is very good news. That is down to good management, people wanting to use the service and good marketing. As a Corkman, I am happy in that respect.
On Dalton Philip's departure, I know there were difficulties around the situation in the summer, but he is a good man and I wish him well. He had a vision for the airport, from a capital development point of view, and he was quite a forward-thinking individual. Obviously, Covid caused enormous difficulties for aviation, which we have teased out in the committee. However, I have a few concerns. I have been on record in voicing my unhappiness with terminal 1. I am a regular user of Dublin Airport, primarily because if we are travelling for business midweek, it is close to Leinster House. I often take the Ryanair flights out of terminal 1. It does not reflect the country Ireland is, how developed our economy is, the success story of the Irish economy and the success of aviation. There are thousands of people in the city today who have flown in for the aviation conference. We are a global hub and a global player, but terminal 1 does not reflect that. I encourage Mr. Jacobs to deal with that situation as the incoming CEO.
On the development of a major piece of terminal infrastructure, I stand to be corrected, but I understand it is going to be 2029 before we see that new infrastructure come online at the airport. What is DAA's view on the €100 million underground tunnel at the airport?
Mr. Kenny Jacobs:
There are a number of issues raised there by the Deputy. On the tunnel, which we have talked about briefly, I will ask Mr. Harrison to speak more on that in a moment. If the regulator wants us to do the tunnel from a safety point of view, that is very important. The tunnel is part of a €1.9 billion capital investment programme over the next number of years, so I do not want it to become something that is a be-all and end-all issue. It is part of a big programme which we have. We are good at infrastructure. Airlines are good at buying aircraft and fuel at the right time. We are good at doing infrastructure. The north runway is a very good example of good forward planning in Ireland and as to how it is done. It came in ahead of time and under budget. In respect of the tunnel, the regulator wants us to do it for safety reasons and we have customers who want us to do it because it will improve efficiency at the airport for cargo operators and for commercial airlines operating there. We wish to go ahead and do the tunnel at the right time because we believe it is required and Mr. Harrison can add a little more on that issue.
I will speak now on T1 and on Cork. Cork is great. When I worked on the airline side, it did not have the growth it has at present. It has a good deal of growth at the moment. I was there last week and it is fantastic. The only thing that goes wrong in Cork is the wind, which Mr. Niall MacCarthy and the team cannot control. It is a very efficient airport. Everything works well and everybody there is happy. I am happy because I am from Cork and I love getting messages from friends and family saying that Cork Airport was a dream today. For business travel, for families heading away; Ryanair have added Valencia, Seville and La Rochelle as great destinations, particularly for the summer season. That is fantastic. Long may that continue in Cork and that the wind does not become a problem on any given day.
On T1, I want it to be better. I was probably its most frequent customer for five years of my life and, trust me, I have a long list of things to do, including stuff to take down, decluttering and specific toilets which I want to have fixed. There is an infrastructure bit but I am not in any way giving anybody a kick-to-touch answer that infrastructure will solve and make T1 better. What makes T1 better is the management team going up there every day, like it is a big shop. For me, every airport should be a fast and friendly flight factory. I do not mind using that language because it is about getting through, efficiency at security, and that it takes less than 20 minutes. Ultimately, in a few years’ time, I would love to change that 20 minutes target downward. I would like every single toilet to be clean and to never have issues with the toilets. One should be able to get a coffee or a drink, whatever one wants, and be able to get a seat. It is that daily grind of running a big operation. T1 is compromised because it is a very old building. It is never going to look like an airport one would see in other parts of the world, it is the terminal which Ryanair operates out of and it wants to grow. Our job is to work with that airline so that it continues to grow but that we make it a friendly and fast customer experience, with all of the difficulties around that. I think we know and are getting on with fixing that.
We took down the tents and the barriers associated with the queues last summer. We did not need them over the course of the summer but they were a visual reminder, so we took those away at the weekend. Staff were very happy with that.
We also took down all of the Covid-19 signage because you did not need to see that coming back through immigration. These were things we had worked on already. We have changed our toilet supplier. This is boring stuff.
James O'Connor (Cork East, Fianna Fail)
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But it does make a difference.
James O'Connor (Cork East, Fianna Fail)
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My apologies for interrupting Mr. Jacobs but I have a limited time slot. There are a couple of things I wish to mention. I cannot remember the name of the pier but it is the one that is furthest away. Is it pier D I am talking about in terminal 1?
James O'Connor (Cork East, Fianna Fail)
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Even from the perspective of the availability of teas and coffees, if one is further down the building where there is some catering and duty-free; I find that there is very little life at that pier. This is something that would make a great difference with a requirement of minimal investment. I find that the area around the check-in is very cluttered, as you enter the building. It would be great to fix that.
Many concerns were also raised with me on the sanitary aspect. Mr. Jacobs stated there that the DAA has changed its toilet provider, which is great to hear.
When one goes over then into the terminal side, in the morning when going through security at peak hours and one is effectively then into the departure area of the airport; that corridor, which is there with the Starbucks restaurant, is not good. It is very uncomfortable and in one experience I had before Christmas, it was sad to see that many older customers were struggling after they had come through security, as you then literally enter into a blaze of people on that corridor leading down. It would make a world of difference when going over that corridor if additional space was created for retail and catering. For a minimal investment, one would get a great deal more of a return for the customer. That is something I would appeal to the DAA to address. I have spoken to Mr. Harrison about this before and under new leadership, this is something to be looked at.
On the regulatory regime which was put in place in 2001, this has effectively been the system which has controlled the prices at Dublin Airport. Arguably, the airlines would say that this could potentially have benefited the airport more than it did the State. Can I have the DAA’s insight on what has been published in the review? What are DAA's views on the outcome of this review in terms of delivering that infrastructure? It is potentially going to be the end of this decade before we are going to see any hard concrete being poured or action for new infrastructure at the airport for additional capacity. What does the outcome of that review mean?
Can the DAA also reflect on the growth in numbers? Dublin Airport has not quite reached its 2019 passenger level yet. At that time, the numbers were slightly over the recommended operating capacity for the airport. What is the DAA’s interim plan to deal with that additional capacity that may come down the line? Hopefully, we will have returned to the 2019 levels by next year but beyond 2024, what does the DAA envisage the airport looking like? Potentially there could be 7 million or 8 million more passengers by the end of the decade in an airport that has been built for an operating capacity of approximately 30 million passengers. Can Mr. Jacobs give me an insight on that point because it is quite serious? We do not want to revisit what happened last year, as I have strong concerns in that regard.
Mr. Kenny Jacobs:
I will ask Mr. Harrison to cover the second of those issues on the regulatory reviews and on what the airport will look like at the end of the decade.
Specifically, before I do that, on the question of pier 1 in terminal 1, we walked it together in the past week. We have a long list of the matters raised by the Deputy. On the question of teas and coffees to be provided in the summer peak months at the far end of that terminal, that is, when one has gone right after Starbucks, has done the walkways and is down at gate 116 at the end of pier 1 in terminal 1, this is an area that could be looked at. There might be permanent cafes which we will always look at with respect to where they will go in a permanent space, but we are also looking at how we provide those facilities on what I call the big cup final days, when one has the big exodus from Ireland. These are fairly predictable days. The provision of the teas and coffees is a good idea - we had the same idea - and we are looking at that.
On checking in at T1, we, meaning the DAA and Ryanair, specifically, would not want to have to do check-in there. Ryanair is looking at the bag drop in all of the airports it operates in, including Dublin Airport and T1, obviously. That is something where we would like that one could go straight to security, or through Fast Track, without having to do check-in. However, on completing that whole check-in process, in the case of a family with big bags that have to be checked in, it is about making that smoother and taking away the big density of people who are there. I know that Ryanair is looking at a number of initiatives, as will we.
On Starbucks, mentioned by the Deputy, it does get tight there at that point. If it is a Good Friday morning when there are many families and parents with buggies, the space becomes narrow there. The question as to how we might free that space up as much as we can is one thing we have identified. This is not about making it a big year-long project but that we would ask what we could do on Good Friday morning to declutter and make it easier when there is a big throng of people going through.
This is the daily grind and on those big cup final days, we are looking at those three things the Deputy has mentioned. I ask Mr. Harrison to cover the regulatory regime issue and what we think the airport needs to look like at the end of the decade.
James O'Connor (Cork East, Fianna Fail)
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I thank Mr. Jacobs.
Mr. Vincent Harrison:
On the regulatory regime, as stated by the Deputy, it has been in place for 20 years. It has pursued a relentless purpose, which is securing the lowest airport charges such as are levied at Dublin Airport, which is the case by any comparison. That is, pretty much, what the legislation says it has to do. I have some hope that with the new legislation and the amalgamation of other regulatory requirements or processes within the same body, perhaps a more balanced view of the entirety of aviation might emerge from that body. That is yet to be seen, however, because that merger has not taken place yet. That is perhaps looking in hope into the future.
One of the things I have mentioned previously is that there is not an incentive built into the system to have infrastructure there before one needs it. In fact, there is a penalty for doing so in respect of reducing one’s pricing. That makes it quite difficult to both meet current requirements and build. When you are building in a busy airport, inevitably you are taking away some capacity in order to build on it, while providing for the long term.
We have a very significant construction plan ahead of us. When you use dates like 2029, we are talking about the end of the process for all of the construction, as opposed to nothing being delivered within that time. We can clearly take the committee through the graduated phasing of the delivery of infrastructure in some other process.
There have been a number of indications as to what can be done by the committee, either in terms of policy context or otherwise.
There are two things that create a difficulty for us. One, as I said, is the regime in terms of funding capacity. Coming back to one of the points Ms Gubbins made about our lending capacity or credit rating, we say to a lender that we will not damage our credit rating. Therefore, if there is any possibility we will do that, of course, we will defer the investment and not strain our balance sheet. That does not make the capacity get delivered any further but it does make us capable of maintaining the financial integrity of the country. That is an inbuilt compromise that is in the existing system that could be amended with a different, more assertive funding mechanism in place.
The second thing is planning. It will not surprise anybody in the committee that all of these large infrastructure projects have yet to go through planning processes, the An Bord Pleanála appeals and so on, and they will do. A concern I would have and would share with infrastructure providers is that while housing is fundamentally needed in Ireland, and there is no doubt about that, we need infrastructure in the economy as well. I suggest that as we pressurise the planning system to provide more houses, we need to pressurise and equip it to provide infrastructure as well. Ultimately, having all the people housed appropriately but not able to access public transport, airport infrastructure and so on will not be an optimal solution either. That is one area where we would absolutely like the committee to carry the flag, which is in terms of enabling us to have a plan in place to build that infrastructure and to provide it gradually, although there are probably too many components of the jigsaw to outline them here as to what precisely that will look like.
James O'Connor (Cork East, Fianna Fail)
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Perhaps it might be beneficial to the committee for the DAA to do a briefing for us on that at some point.
Duncan Smith (Dublin Fingal, Labour)
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I welcome the witnesses and congratulate Mr. Jacobs on his appointment. It is great to have the role filled.
There are a couple of areas I want to touch and expand on. On the capital investment side, for those of us who are more familiar with Dublin Airport and have been given detailed briefings, we know how important this capital infrastructure is and we know it needs to be funded. It is all very unsexy stuff but it is the reality in terms of delivering a top-class international airport. We had a committee meeting before Christmas with Michael O'Leary and Eddie Wilson from Ryanair. It was a very entertaining meeting, full of colour, and, in particular, Mr. O’Leary was absolutely lashing the tunnel out of it, so to speak. However, we heard as a committee today how succinctly and clearly it has been communicated by the DAA why it is important. It is a condition of the regulator and it is about safety. No one wants to spend €200 million on a tunnel for no reason. There is no vanity in it. It is something that needs to be provided and needs to be funded accordingly. It does not look as attractive as a €9.99 flight to X, Y or Z on an ad, but it is very important because those flights cannot happen unless we have a safe airport that is well funded and strategically funded.
I will come back on the Commission for Aviation Regulation, CAR, pricing decision. I first want to talk about the flight deviations, without going over too much of the ground that has been covered already. We have residents from St. Margaret's, the Ward, Ballyboughal, Rolestown and Killsallaghan who are up in arms over what has happened in recent months and will continue to happen until at least 26 February. There is a request from those residents to address the committee, and I think we should allow that. There is a precedent for that from 2003 and, as a committee, we probably do not hear from impacted citizens enough on whatever the issue may be. That is something we should respond to in a positive way.
On the flight deviations, when did the DAA find out or notice that these flights were going to deviate in such a way? Was it the morning of the first flights out that they went in that right-hand direction across those areas or did the DAA have a week’s notice or a month’s notice? When did the DAA know the flights were going to take that deviation?
Ms Catherine Gubbins:
The runway went live on Wednesday, 22 August, and the first notification I got around it was on Friday, 24 August. At that point, we had had a number of flights taking off and there was a pattern, so when we saw that pattern and it was different from what we had anticipated, we started to engage on it.
Duncan Smith (Dublin Fingal, Labour)
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How did Ms Gubbins feel when she saw that? I was at the vast majority of those public consultations. We were intimately familiar with the noise contours and they basically went east to west, with the waves either side, but they did not go that way. Would Ms Gubbins accept there is a huge breach of trust with the residents of those communities that will be very hard to repair because of what has happened?
Ms Catherine Gubbins:
Absolutely. We have acknowledged that it was unexpected and that we were disappointed to see it ourselves. We absolutely needed to start the process of engagement internally and externally with the various parties, who, with us, are responsible for this, to understand how it had happened. That involved us going back through the various engagements that had been held and understanding what had happened in 2016 and in the intervening six years until the runway actually went live. I fully accept that. With regard to a potential breach of trust, what I would say is we immediately started a process of engagement with the relevant community groups and local councillors and representatives because we were aware that communicating and letting people know our position and our understanding of that position at all periods was appropriate from that point until now. That is how we have tried to address the concern in the neighbourhood and to address that breach of trust.
Duncan Smith (Dublin Fingal, Labour)
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One of the big issues I had was that the airline noise competent authority, ANCA, was so closely linked to Fingal County Council and the DAA is such a high ratepayer of Fingal County Council. There was always this concern that the parties were too close for a regulatory function and the first thing out of the gate, or out of the runway, was this. It has just crippled trust, unfortunately, and it will take a long time to repair, if it can be repaired at all, with the communities.
Duncan Smith (Dublin Fingal, Labour)
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In terms of the air noise that has impacted on these residents, they go to ANCA and to their local councillors, who are getting huge pressure, but ANCA is saying it is not its problem, the DAA is saying it did not know until the first flight took off, and the IAA is wiping its hands of it. Everyone is just throwing their hands up in the air and asking how anyone could possibly plan a runway that cost so much and had so much public consultation and then, on the morning of the first flights going out, no one knew that the first flights were going to take a right turn in the way they did. There is huge anger and there is a big meeting tomorrow night about it. I hope that, over the course of the next few weeks, we will have further clarification and that we can start to rebuild trust, but there is a lot of understandable anger out there.
I will move to the pricing. Point 11 of the DAA submission states that the regulator disallowed the recruitment of 240 of the security staff needed at Dublin by 2026 because of its decision on pricing. I am very clear that I understand the pricing. I am not saying we have to bring the prices down. I know there is no link with the price of flights, as the witnesses outlined, and we need to fund and be able to invest in our airports. However, this is the standout line in the whole DAA submission and in the contributions, that the DAA is now saying that 240 staff cannot be hired because of this pricing decision. Is the DAA saying that clearly?
Mr. Kenny Jacobs:
I am not saying that. What I am saying is that the 240 is the difference between 750 and 1,000 over the years 2023 to 2026. That is the regulator's modelling. I again reiterate that we do not have an issue with independent regulation. It is about the inputs it uses for the modelling process, the data it uses, where those data are from, and whether those data are considering Covid or considering resilience. That is a question we have.
Duncan Smith (Dublin Fingal, Labour)
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Is this what the submission means at point 16, when it states “We need to RESET”, using capital letters.
Mr. Kenny Jacobs:
That is what I mean by “We need to RESET”. We are taking two cost lines. To just take that one cost line, security staff, the regulator's model is saying that for 2023 to 2026, Dublin Airport should have 750 staff at security. That does not take into account Covid, if anything like that happened again and we did not have staff at security because they got Covid, as we had in every business and organisation in the country. It does not take into account C3 scanners, which are a totally different piece of technology, and it does not take into account resilience.
Forgetting about Covid, it is important to have a buffer for things that happen in big organisations and life and have that resilience built in. Our model says we need 1,000. They say that our model shows a need for 750 and it leaves out many of the things that have happened in the past two years. That is what we mean by the difference in-----
Duncan Smith (Dublin Fingal, Labour)
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That is good. The DAA needs 1,000, so it will have to deliver 1,000 either way, I image. Therefore, to get that funded, something else will suffer.
Mr. Kenny Jacobs:
Now we are into running the business and the choices that one makes. Do we want to compromise security? Absolutely not. Do we want to plough on and have 1,000 people so that we have more than 90% of passengers going through in 20 minutes or less? Yes, that is what we want. Do we want to compromise standards elsewhere because we are pulling staff from other parts of the operation into security? No, we do not want to do that. We want to have the right level of security and the resilience around that and the right level of standards across the airport. In our statement, we are saying that we need to have a reset on how the regulatory price is set. The inputs used in their modelling do not reflect the reality of the past two years and the level of service that this committee, the Taoiseach and everybody wants in the coming years.
Duncan Smith (Dublin Fingal, Labour)
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On the figures, I think the average was 759. What is the difference in figures per flight, per passenger or whatever between what DAA needs to deliver what it needs and what has been agreed by CAR?
Duncan Smith (Dublin Fingal, Labour)
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They are not even including that.
Mr. Kenny Jacobs:
They are not including anything in what we would now consider and call the new reality of flying. Every airport, every country and every airline is saying that resilience will be a challenge. There needs to be an increase put in for resilience, an increase for the extra staff that we know we need to operate the C3 scanners that we need and the growth that we want to have in the number of flights. That is the difference between the two numbers.
Duncan Smith (Dublin Fingal, Labour)
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The DAA itself now has to put in plans for this. It has to look at-----
Mr. Kenny Jacobs:
Yes, but the immediate focus is the summer. We want to get through the summer without issues, we want operating standards to be where we expect them to be and where the public wants them to be and that security takes the 20 minutes and not more. That is what we would like to happen. We will get through the summer first and do what we need to do. We still have more things to do. Our immediate focus and my number one priority is making sure that Dublin Airport is the right experience for customers going through this summer.
Duncan Smith (Dublin Fingal, Labour)
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Brilliant. In the two minutes we have left, can Mr. Jacobs speak to the single European sky, which is something that the International Air Transport Association, IATA, and Ryanair have previously spoken about when they were in? Everybody seems to be pushing the same direction here. Where do we need to lever on it as politicians? What needs to be done and what are the blockages to having a single European sky?
Mr. Kenny Jacobs:
This can happen very quickly. It needs to happen at a Brussels level and overflights need to be allowed. What usually happens is, for example, French or Catalonian air traffic control or air traffic control in certain parts of Germany have staffing issues and regular strikes. That results in everybody having to deviate their flight paths. This means that for people flying Dublin-Faro on their holidays, the plane has to take a longer route to get there. That is how it works. We would ask the committee to put pressure that there is a real conversation. Every airline and IATA will state the same. We would like there to be a conversation in Brussels that this can happen and that overflights are allowed. Overflights would mean that if there are air traffic control restrictions in France because there is an air traffic control strike, that is a domestic issue within France, however, if a person is flying from Dublin to northern Italy on their holidays, that overflights are allowed and they can go through French airspace without being disrupted.
Duncan Smith (Dublin Fingal, Labour)
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Where is the political energy on this? Is there political energy on this or is, for example, France blocking this? Is this a conversation that is happening at the moment actively or is this just a call from the industry that is not being listened to?
Mr. Kenny Jacobs:
It is being listened to but it could be listened to more. I have worked in an airline and ten years ago would have been calling for restrictions on air traffic control and to allow overflights, but ten years later it is still happening. I think everybody involved in aviation is fed up and is right to be fed up with this. We would like greater pressure that there is a single European view taken on this to say, for example, if French air traffic controllers go on strike or regional German air traffic controllers have staffing issues, that then impacts their domestic market and it should not impact people flying from Dublin over France on their way to Italy on their holidays. That is something that can be fixed. There is nothing technical getting in the way or nothing safety related to this. This is something that can be decided. There will obviously be some political resistance. The support that we would-----
Duncan Smith (Dublin Fingal, Labour)
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Industrial relations resistance to it in those states.
Mr. Kenny Jacobs:
There is resistance to it in the State because I think it will view it as interference at a European level in terms of how it runs its aviation. I think that is the barrier. Airlines and airports manage around it. We do not want any one of our passengers to be on the tarmac on a Ryanair or Aer Lingus flight this summer waiting to get to Italy on holidays because the flight is delayed because there are restrictions on airspace due to air traffic control strikes.
Cathal Crowe (Clare, Fianna Fail)
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I welcome everyone from the DAA. I have been following much of the debate from my office, but I have also been in the Chamber. I apologise if I touch on questions that my have been asked or asked in a different way.
I congratulate Mr. Jacobs and wish him the best of luck in his new role. His predecessor – and this is not personal about him, this is DAA inc. – has had much success in recent years, however, I would describe the relationship towards Shannon as predatory, and I am a Deputy from County Clare. We recognise it is the national airport; it has a position of dominance. However, sometimes a position of dominance is what it is and is used at times to subvert Shannon. There has been aggressive marketing on the doorstep of our airport and, indeed, the poaching of passengers by bus. I heard Mr. Harrison’s explanation that it gets people out of cars, and it does, but there is another motive as well that drives passenger through Dublin Airport’s terminal, which is the real aim of that.
We are looking at a national aviation policy. We want Dublin Airport to grow and flourish. However, we also want to protect our other airports, particularly on the west of the island, and ensure that they also grow and are on a growth trajectory in the coming years. It is not all for Mr. Jacobs to solve; it is more for us to solve. Can he tell us something about his term of stewardship and how he will be towards his counterparts in Shannon, including Mary Considine?
Mr. Kenny Jacobs:
I had a good relationship with her when I worked in Ryanair and I wish her and the team at Shannon absolutely the best. We operate Dublin and Cork Airports, so that is what we want to talk about and what we have been asked here to talk about today.
I wish to say a few other things. I would absolutely love Cork and Shannon to be competing. Having worked on the airline side, I know that is where the competition exists. Cork, Shannon, Knock and Kerry always compete heavily and airlines view it that way as well. I do not see it as a competition between Shannon and Dublin. Dublin’s competition is airports like Manchester and Edinburgh. Definitely, I will be taking what Senator Dooley pointed out on the aggressive marking and applying that to Manchester and Edinburgh because they have plans of doing transatlantic with US Customs and Border Protection, CBP. We will have that fierce competition with those other airports that we consider a competitor to Dublin that want to take some of our customers. We do not want that. We want people from the north of England and Scotland coming to Dublin and using it to fly transatlantic. That is a great product and that is where we see our competition; we do not see it as with the regional airports. From a Cork perspective, there will be competition between Cork and Shannon, and that should continue.
Cathal Crowe (Clare, Fianna Fail)
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We visited a number of airports in the Netherlands, as I am sure other members have told Mr. Jacobs. We were very impressed by Rotterdam airport in particular, where they have embraced the whole realm of sustainability. Along the entire runway there was a network of solar panels with anti-glare effect, which worked perfectly with landing and taking off aircraft. They also had a number of hangars in a development zone down the back of the airport where they were trialling everything from battery-powered aircraft, solar-powered technology for aircraft and a whole range of stuff – and, of course, hydrogen, which everyone is talking about, and sustainable aviation fuels, SAFs. Where is DAA at in that space in terms of positioning itself at the top of Europe on that league table?
Mr. Kenny Jacobs:
That is great. I have not been in Rotterdam airport for about 18 months. I think the Dutch have traditionally been leaders. We want Dublin and Cork Airports, as is our plan, to be leaders in this space as well. We want everything the Deputy listed, from the solar panels to the batter-powered and hydrogen aircraft, to be trials at Dublin and Cork Airports as well in the coming years, as well as everything else that is listed in our statement as part of our sustainability plan, such as only electric buses taking people from the carparks to the terminals. We have reduced our carbon by 26% while we have grown and added 14 million passengers. That is no mean feat. We have a target that we are net carbon zero by 2050. We have done a huge amount. This is one of the biggest challenges facing the industry.
On sustainable aviation fuel, there is not enough of it out there. That is what the airlines would say. Ryanair has a fantastic, big and brave plan to get 25% of its fleet using SAF by 2030. We would welcome more SAF being used.
We incentivise airlines that use sustainable aviation fuel and that will continue. We will work with the airlines and fuel providers to make sure that it will become a bigger part of what we do at the airport. The bigger issue is the production of sustainable aviation fuel.
Cathal Crowe (Clare, Fianna Fail)
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I will ask about Alliance Aviation, which is an important customer of DAA. It brings a lot of private passengers and private aviation through the airport. I will put a scenario to the representatives. My understanding is that since July of last year, non-commercial passenger traffic, including Alliance Aviation, is directed to the west apron when it lands at Dublin Airport. Passengers then disembark and are transported by car or bus around the airport perimeter to get to the platinum lounge, which is a circuitous journey that takes approximately 20 minutes. It is not really what business passengers want when they land in Ireland. It gives a fairly poor first impression of Ireland, when people arrive and have to do this big lap around the airport. Alliance Aviation, and other companies, has offered to develop facilities within the curtilage of the airport from its own coffers. Will the representatives comment on that? Is Dublin Airport meeting the benchmark for private jet aviation and business travellers when they are made to take this big route around the airport's outer perimeter?
Gerry Horkan (Fianna Fail)
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Is this issue tunnel-related maybe?
Mr. Vincent Harrison:
Yes, the Deputy sold a business case for one of the users as regards the convenience aspect and efficiency of the tunnel operation. The company he mentioned is one of a number of providers of the service. It is located in a particular location at a hangar that it acquired through a tender. Most of the private jet operations accommodated in Dublin Airport operate from the east side where the same conditions do not necessarily apply in terms of exactly what the Deputy described. We have ongoing discussions of the plans and proposals that that company has. We engage with it. One aspect that is very clear to all is that we have an airport security regime which imposes particular restrictions on where passengers of any nature are processed at the airport. That is one of the paramount considerations when we get into the detail of some of those proposals.
Cathal Crowe (Clare, Fianna Fail)
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I note the new tunnel the DAA is planning would cost €200 million. It is a big outlay of money. Of course, this alone would not solve the problem but if companies, such as the one I mentioned, are lining up with offers to develop their own facilities from their own finances, would that not be part of a solution the DAA should entertain at this time? Rather than having people drive a loop around the airport perimeter, should they not have a facility across the airfield?
Mr. Vincent Harrison:
I referred to the security regime, which is governed not by ourselves but by the Department of Transport's national security policy and security regulators. This is the bigger element of concern in respect of what the Deputy described. What he described is, in effect, processing passengers outside of the airport facilities, which is highly problematic from a security point of view.
Cathal Crowe (Clare, Fianna Fail)
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I will ask about wage levels. Many of my colleagues have already asked about staffing and getting people through security. Where is the DAA at when it comes to paying these people? Will the representatives give us an indication as to how the salaries of the lower paid have improved or remained static, if that is the case since the onset of the Covid pandemic?
Mr. Kenny Jacobs:
I will make two points. It continues to be a difficult labour market but, in November last year, 98% of our unionised staff voted in favour of a pay deal. That is a very high percentage. I have not seen as high a percentage in any other business in Ireland. That is what I have to say on that matter.
Cathal Crowe (Clare, Fianna Fail)
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Is it enough? Is that pay deal under any further reviews at present?
Mr. Kenny Jacobs:
It is a tough labour market. Everybody who is involved in the aviation campus is looking for staff. Handlers, the airlines and everybody are looking at that. Everyone is doing what they need to do, including spending money on overtime. We always look at everything in the mix, including how we train staff and how we manage them in order that everybody is motivated and is well rewarded. Specifically, 98% of unionised staff voting in favour of a pay deal as late as last November is an indication that we do not see pay as a barrier.
Cathal Crowe (Clare, Fianna Fail)
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When members of this committee went to Holland - we often feel like an aviation committee - to examine-----
Gerry Horkan (Fianna Fail)
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That is one for the members own-----
Cathal Crowe (Clare, Fianna Fail)
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When we went to Holland, we examined its national aviation policy. One of the things we saw was that it caps the number of aeroplanes that come in and out of Schiphol. That enthused us because Dublin enjoys a position of dominance. Cork, Shannon, which is in my constituency, and Knock airports then grovel to get that other space. Only 9% or so of the market is left for those airports to try to compete for. The cap in Holland is not what we believed it to be in the first instance. It is more an environmental cap. It was made very clear to us as we left Rotterdam Airport that such a cap is coming down the line for all European airports. There will be environmental caps relating to fuel and nitrates directives, in addition to noise outputs from airports. Dublin Airport is already grappling with this in respect of residents around Saint Margarets, The Ward and areas like that.
Schiphol started working with other airports. It was felt that its way of maintaining its position as the national airport of the Netherlands relied on giving a slice of the cake to other airports and divvying it up more than it had. That is now working a little better. It is not perfect, and we have learned a little more about it in the past few weeks. I will return to my initial question regarding the likes of Shannon Airport, in addition to Cork and Knock airports. How can they help the overall national aviation picture, when Dublin Airport is probably getting quite close to those upper limits that the European Commission will have?
Mr. Kenny Jacobs:
There are a few elements to that. I reiterate that Dublin Airport is competing with Manchester, Edinburgh and the big international hubs. Regional airports in Ireland are competing with one another. The geography of the Netherlands, and the distance between Schiphol and Rotterdam, is very different from travelling by road from Dublin to the other regional airports in Ireland. That is one point. I know Schiphol well and there is a great story on all the things the Deputy called out. I will call out one thing that the Dutch are not doing right. The Deputy listed many things they are doing on sustainability but, at the same time, the Dutch Government is saying that if people fly from Dublin to Schiphol and then from Schiphol to Nice, which produces more carbon than flying from Dublin to Nice directly, it will exclude the connecting flights from carbon emissions calculations. It is somewhat the case that all the things the Dutch Government is doing we are doing as well, but every flight should be taxed and there should not be an exclusion for connecting flights.
Not everything the Dutch do and everything at Schiphol is something we want to do at Dublin. The geography of Schiphol and Rotterdam is not the same geography as that of Dublin to the regional airports. Our competition, and the way the airlines view it, is Dublin versus the international hubs but Cork, Kerry and Shannon are competing with one another when it comes to flights. That is the way the airlines look at it as well and they will continue to be part of that healthy competition.
Gerry Horkan (Fianna Fail)
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Despite being the Chair, I do not get the perk of going first. I am last on today's first round. I thank all the representatives for being here. We have covered a lot but I will return to a few matters.
I never appreciated that Good Friday was such a bad day to travel before now.
Gerry Horkan (Fianna Fail)
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There have been about ten or 15 references to it. For a long time, we were trying to get the pubs open on Good Friday. It now seems to be the day people should not go to the airport.
The point was touched on that 20 minutes should not really be the base. I acknowledge that I have recently, in December, gone through Dublin Airport in less than ten minutes. However, I would like to see more ambition than 20 minutes. It is great to have that as a starting point but I do not like the idea of people arriving at the airport, particularly a family with children who are going on holiday, for example, hanging around in a queue for 20 minutes and nudging their way forward. Senator Dooley made the point that it is sometimes quite frustrating to be in a queue looking at people, where there is only room for about two or three others who are a little slow, when people want to get their belts off and empty their pockets and there is nowhere in front of them to do so. The trays might have come back so far but people cannot get to them because they do not go around a corner. Is there is a way of redesigning that? Maybe there is not, but this situation takes place in terminal 2. In addition, I do not think people realise that they can go into terminal 1 and walk across to terminal 2, andvice versa, if they realise one is much faster or slower than the other on a given day.
That may be something Mr. Jacobs does not want the world to be that familiar with. It is certainly worthwhile doing occasionally.
Mr. Jacobs might touch on the level of interaction the DAA has with the regulator. Is there a mechanism whereby it can approach the regulator? The growth figures for Dublin Airport from 1998 were 11 million up to 32 million until the pandemic put a halt on all that. Those growth figures are phenomenal. Huge credit is due, initially to Aer Rianta and subsequently to the DAA and all of the people at the airport, in the DAA and the airlines themselves. There are no passengers without the airlines. Mr. Jacobs knows from being on the other side of it that the success of Dublin Airport is a team effort on behalf of Team Ireland. Is there a limit on the capacity for Dublin Airport Inc.? Is there a passenger cap within planning permissions of 32 million or 34 million? Can it go to 60 million? What is the building capacity of the terminals and what is there now? I have sometimes used the south gates in terminal 2 and I find them somewhat frustrating. I find myself praying that the aeroplane turns left rather than right. It is 10 p.m., the aeroplane turns right, and I know I will have to get on a bus to get back. How are we going to future-proof the airport? Within the entire regulatory mechanism, it seems to be that the better you perform, the less you can charge. Perversely, the less well you perform profitably, the less money you make on retail, concessions and parking, the higher the passenger charge might be. The more money made on these things, the lower the passenger charge. It is almost a zero-sum game. There is no real reward for being better other than being better. It just means being able to charge the passengers less. That seems to be a flaw in the legislation. In the longer term is there a need for a third terminal? Does Mr. Jacobs believe that should be run by the DAA? I presume he does. Would there be an idea that someone else would run it?
We mentioned the new machines. We visited them when we were in Shannon Airport in May 2022. They are much bigger, more expensive and heavier. They are wonderful but can as many of those machines be fitted in? I believe we have to have them by 2025. How much will that improve the levels of efficiency? I would be interested in the list of 18 airports Mr. Jacobs stated Dublin Airport is cheaper than. He can circulate that to the committee afterwards. I would also be interested in the one of the 159 infrastructure projects that was not agreed to. In regard to capacity for additional airlines or airline services, I met a commercial manager of one of the airlines last summer at a function who said his airline would do a second flight a day into Dublin but it cannot get the baggage handling and check-in staff. I accept this is not Mr. Jacobs's direct responsibility, but to a certain extent everything that happens on the campus reflects on him, whether that is aeroplanes not being de-iced or bags getting lost. I know he is not directly responsible. However, how does he make sure there is minimum reputational damage to the DAA? How does he make sure the people operating on its campus do what they do?
I was in Hamburg last year and was an hour and 55 minutes getting through security. I was able to look and realise that the aeroplane had not yet left Dublin so we were not going to get into trouble, but at the same time, I acknowledge Dublin is having significantly fewer problems than other places. I do not think any of us touched on the fantastic work DAA International does. I was in an airport a long way from Dublin seeing advertising for The Loop. I was struck that this was a DAA-managed operation. We should acknowledge how well Dublin Airport Authority Inc., separate from all the wonderful things that are happening both in Dublin and in Cork, does in terms of airport management and the management of airport retail.
I am dropping two people to an Aircoach service at 3.30 a.m. to get a flight at 6.30 a.m. In regard to connectivity, what does the DAA do in terms of proactive offering of better services and more capacity for Aircoach and all the others - the private operators, Dublin Bus and so on? There seems to have been an issue around taxis. There was a yearly fee they had to pay, and there were issues around that and the fact they could drop off but not pick up. It seems to me we are missing out on taxi capacity because people have not paid this fee. Is there a better mechanism that could be applied that would allow them to pay per journey as opposed to per year so that everybody can serve the airport? All the points I would have liked to make were touched on. There is a great deal in that, and Mr. Jacobs can go ahead. I congratulate him on his appointment.
Mr. Kenny Jacobs:
I thank the Acting Chair. There are five things there so I will quickly outline those. First, on Aer Rianta and the international activity, I thank the Acting Chair for saying that. We feel great pride in going to different parts of the world and seeing parts of the organisation. That is fantastic. That chimes with what I said about Ireland being great at aviation. We take great pride in that. They are fantastic teams operating in Aer Rianta International and DAA International.
Second, I will touch on security, handlers and airlines saying they want to fly more but cannot get the staff. I will handle that. I will let Ms Gubbins and Mr. Harrison talk on the longer term issues. Mr. Harrison can also talk about buses and taxis.
In regard to security, we have an ambition for it to be faster than 20 minutes. We are not setting a target at the moment. The regulator says anything beyond 30 minutes is a problem. We have an internal target of 20 minutes. Cork Airport operates to the target of 15 minutes. We would love to get there. We are not saying that is our new target or will be anytime soon. That comes down to what we are able to achieve on staffing and the use of technologies and everything else in the mix. The immediate focus is on staffing and getting from 645 to north of 800 staff in time for the summer peak in order that we get through the summer and, more importantly, passengers get through the summer without any dramas at security. That is priority number one, two and three between now and October.
On the redesign and the pieces the Acting Chair called out, the new C3 scanners are bigger pieces of kit. They are heavier and have a broader footprint. However it is a better experience for customers.
Gerry Horkan (Fianna Fail)
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Will there be fewer lanes?
Gerry Horkan (Fianna Fail)
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Not as many lanes might be needed because they are faster.
Mr. Kenny Jacobs:
A bigger footprint might be needed depending on what you want to do. There is a redesign piece that we are constantly looking at. The immediate focus is on staffing levels all the way through to the summer. However, the redesign piece and that specific piece of kit the Acting Chair called out-----
Gerry Horkan (Fianna Fail)
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Is it 2025 the machines have to be in by?
Gerry Horkan (Fianna Fail)
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The liquid limit is gone.
Gerry Horkan (Fianna Fail)
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No, the 100 ml limit was always there, but is the 100 ml limit gone?
Gerry Horkan (Fianna Fail)
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Is there still limit of 100 ml with the new machines?
Mr. Kenny Jacobs:
Currently, the limit is 100 ml but they do not have to taken out of the bag. We will look at the redesign piece and how we can make that a better experience for customers and better from a safety point of view in the round. That is on security. The main focus at the moment is on hiring more staff to get through the summer.
On airlines saying they want to fly another flight but cannot because of a lack of handlers, that is a contract between them and the handlers they use. Of course, we will say-----
Gerry Horkan (Fianna Fail)
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Dublin Airport is losing out because they are not operating the route.
Mr. Kenny Jacobs:
The system is losing out. We are all losing out. We would encourage active dialogue between the airlines and the handlers. We get involved and we will meet to make sure handlers are staffed to the right levels for summer. We will have dialogue with the handlers and the airlines to make sure they-----
Gerry Horkan (Fianna Fail)
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Is there a capacity constraint on the airport? Is it 35 million, 36 million, 38 million? What is the limit?
Gerry Horkan (Fianna Fail)
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What is the capacity constraint?
Gerry Horkan (Fianna Fail)
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What happens if that is exceeded? How do you legally get to a position where you can?
Mr. Vincent Harrison:
That is by way of planning application and the associated infrastructure. That is something we are working on in terms of imminently producing that. That to a certain extent had to take a back seat to the planning process around the runway, which has been preoccupying us for a number of years.
The Acting Chair talked about interaction with the regulator. There is extensive interaction. There is a decision that takes up 250 pages.
It replaced a draft decision of approximately 250 pages. There are thousands of pages of material. The problem with that-----
Gerry Horkan (Fianna Fail)
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The DAA and the regulator are definitely talking to each other.
Mr. Vincent Harrison:
The problem with that tends to be that there is a lot of discussion about detail that perhaps does not really crack the core policy points we are talking about. At some levels, the Acting Chair is correct that it is a zero sum game. In some quarters, it could be described as a positive thing because-----
Gerry Horkan (Fianna Fail)
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There is not much reward for becoming more efficient or for generating more revenue.
Mr. Vincent Harrison:
I will put it like this. Looking at it positively, growth and a greater base to spread the costs helps everyone so that there is a rising tide effect. In theory that should happen, and that is one of the reasons we are highly surprised by the decision in 2019, which was based on an upwardly moving profile. That volumes were higher was the reason prices were reduced.
Gerry Horkan (Fianna Fail)
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Many of the DAA's ordinary overheads such as staff, fuel and electricity costs have gone up.
Mr. Vincent Harrison:
The world is a more difficult place now than it was in 2019 when we were at peak performance, even though we were innocent and did not realise what was coming around the corner. We can forgive the process for considering a rising tide, but that the damage will effectively be compounded in 2023 is one of the reasons we must translate the thousands of pages of our submission to the simple idea of our opening statement that it is "inexplicable". There are always arguments about the differences in security numbers and some of the other details, but in summary terms we are uncomfortable with the long-term perspective of how we can achieve the statutory responsibilities we carry as a business.
As I have said in a variety of forums, we are keen to promote all forms of connectivity to the airport, and the more sustainable they are, the better. We are keen proponents of the metro, but in advance of that, we put much hope and expectation in BusConnects, especially in the corridors to Dublin Airport, not only to meet the needs of passengers but to meet the needs of the 20,000 people who work on campus, most of whom do not work for the DAA, but for other businesses, and many of whom live in Swords and surrounding areas and do not have access to off-peak public transport.
The Acting Chair mentioned taxis. They are a perennial issue. The primary problem, from a transport committee the point of view, is a lack of taxi drivers. Various measures may be put in place to address that. We are particularly impacted by that at peak times and night-time. If a concert is on in town, it is hard to get a taxi. It is hard to explain that to an arriving passenger who expects them to be available. Our recent experience over Christmas, when we know taxis were problematic, is that 93% of passengers waited less than ten minutes for a taxi. That is good but we are aware that night-time availability can be impacted for other reasons.
Mr. Vincent Harrison: ...even in 2019
Gerry Horkan (Fianna Fail)
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Is the charging mechanism, whereby taxis must pay a fee to pick up at the airport, a deterrent?
Mr. Vincent Harrison:
It is part of the structure of managing the operation into something that can be managed through a system. In the past year, we have introduced incentive mechanisms entirely focused on night-time availability. If taxi drivers do a sufficient number of pick-ups at night-time, and they are all registered through our system, their annual fees are waived, in recognition of them doing business at that time of the evening.
Gerry Horkan (Fianna Fail)
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That is the first thing I have heard that I had never heard of before today.
Gerry Horkan (Fianna Fail)
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I am not sure what points Mr. Harrison has not addressed. I do not know whether it can be shared commercially, but I am interested in the breakdown of revenue and profitability. Is the car park incredibly profitable or is it the retail, concessions or the airport passengers? Is that all commercially sensitive? I see Ms Gubbins smiling. I would love to know. Revenue is one thing but in terms of profitability, what is the bottom line? Is x amount of profitability coming from car parking, retail, concessions or passengers numbers? I know there would not be anything without passenger numbers. The footfall of dragging them in at €7, €8 or €9, whatever it is and then-----
Gerry Horkan (Fianna Fail)
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Is that the 250 pages?
Mr. Vincent Harrison:
Some of it is commercially sensitive as regards our position vis-à-viscompetition. At the level of Dublin Airport, the model is set up statutorily to require the DAA to generate a return that is sufficient to pay for its operating costs, invest for the future, pay a dividend to our sole shareholder, the State and operate in that virtuous circle. We feel the margins are too tight to do all of those things in a consistent manner at the same time, but we are not doing this for personal benefit or for the generation of profitability through the enterprise. It is as a State entity.
Gerry Horkan (Fianna Fail)
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I will touch on resilience. Is Mr. Jacobs comfortable that the resilience levels, not only for security, but also for toilets, rubbish bins being emptied and all of the cleanliness factors, are building back up? I accept that terminal 1 is an old building, but many old buildings have been refurbished. Is the plan to refurbish terminal 1 or to knock bits of it down and replace them?
Mr. Kenny Jacobs:
The plan is to refurbish terminal 1 and we want to have resilience on security, operational staff and the other areas the Acting Chair mentioned, including toilets, general standards and everything else. I am confident we are working hard and have made good progress. That will continue through to the summer. My number one priority and that of the management team is to give customers the service they expect and deserve this summer. We will constantly be looking at everything from a toilet seat that is off, broken locks on doors and everything that can stop them having a good experience. I am confident that resilience is our first priority. There will be bad days or afternoons when things do not go our way. It is up to us as a management team to ensure we recover and fix it. We are on it. We are going in the right direction. We have made good progress and will continue to do so.
Gerry Horkan (Fianna Fail)
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I accept that terminal 1 is a 50-year-old building. However, I remember when I was a child that the B gates, as they were known at the time, were the only ones open most of the time. The A gates were resurrected perhaps for a few weeks in the summer. We have all of that now as well as pier D, which is a huge addition, yet passengers still come in the same front door and go through the same security footprint that was always there. It has massively increased. What is the building capacity of terminal 1, including pier D or whatever it is called now? What is the capacity of terminal 2? I accept that there is a planning permission limit of 32 million passengers but what is the building capacity? If the 32 million limit was lifted in the morning, could Dublin Airport operate for 40 million or 50 million passengers or would a lot of additional capacity be needed?
No one wanted to touch on the third terminal. Will there be a point in the next five, ten, 15 or 20 years when a brand new third terminal will be needed?
Mr. Vincent Harrison:
In the longer term capacity of the entire area, there is master planning capability of approximately 60 million passengers with a twin runway system fully operating. Airports can be designed to grow in a variety of ways. People in this committee have sometimes referred to what the Acting Chair is referring to as pier D - it is now called the "100 gates" - as a terminal. It is a pier. My expectation-----
Gerry Horkan (Fianna Fail)
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I remember it being attacked as being unnecessary when it was being built, like terminal 2.
Mr. Vincent Harrison:
My expectation, although multiple options can be considered over time, is that the eastern side of the airport, which is the existing airport, will still be the locus for arriving to and from the airport. I expect it to be similar to Heathrow Airport where extended piers accessed by road or by rail are where a person might board the aircraft.
If we talk about extending the existing footprint, we have certainly gone through the process of identifying whether there are other options. There is sufficient capacity ultimately to develop out the airport to that scale and-----
Gerry Horkan (Fianna Fail)
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But additional terminals or add-ons to T1 and T2 would be needed.
Gerry Horkan (Fianna Fail)
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Mr. Harrison would see those as further extensions to T1 and T2 as opposed to a third terminal, or does he see a need for a third terminal?
Gerry Horkan (Fianna Fail)
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I am not necessarily referring to, for example, a third terminal on the far side of a runway that would be independently owned or operated like-----.
Gerry Horkan (Fianna Fail)
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-----for example, T4 and T5 at Heathrow Airport, which are located miles away from everywhere else. I am just asking, if Mr. Harrison would have a third terminal or would he just opt for lots of add-ons to T1 and T2?
Gerry Horkan (Fianna Fail)
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Of T1 and T2. Okay. That has addressed many of the issues.
In terms of BusConnects is the DAA pursuing both taxis and the provision of more 24-hour services by CIÉ, Dublin Bus and other operators. Am I correct in stating that the DAA does not have a problem with more people coming to the airport by those mean, particularly as it might have an impact on revenues relating to car parking? That it is not a reason-----
Gerry Horkan (Fianna Fail)
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I thank Mr. Harrison. Does Deputy Ó Murchú like to come in very briefly for two or three minutes?
Ruairi Ó Murchú (Louth, Sinn Fein)
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Yes. The brevity will cause problems.
Gerry Horkan (Fianna Fail)
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It is hard to be good in two minutes as opposed to 20.
Ruairi Ó Murchú (Louth, Sinn Fein)
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I am not sure either which way.
I want to go back to some of the issues relating to de-icing. In fairness, I do not think I got across earlier what the Aer Lingus representative said. I will throw out what was said rather than what I thought was said, namely:
In other airports however, there is a de-icing area at the airport en route to the taxiway. That leads to a much more efficient de-icing process. That leads to a much more efficient de-icing process. In Dublin Airport, de-icing takes place on each stand. In that scenario you have to move that ground equipment from one aircraft and stand to a different aircraft. That adds more time into the sequence.
The representatives from Aer Lingus spoke about particular issues and said that there was an acceptance by DAA teams on the ground that things could have been done better. Everything seemed to improve from that point of view but it did say there was an infrastructural difficulty and that this is not the same for all airports.
Mr. Kenny Jacobs:
I will ask Mr. Harrison to cover the specific question relating to additional information on the infrastructure. We could have done a few things a little better on the morning of 9 December. By lunchtime, we were happy that everything was in place and that no flight needed to be cancelled because of anything within our remit. That is our view of events on 9 December. It was very cold that morning, and there are learnings for us. We fully accept that.
Ruairi Ó Murchú (Louth, Sinn Fein)
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Does it need to be?
Mr. Vincent Harrison:
There are mixed views on that. Many of our customers say that it is not a beneficial provision because it creates a single point of failure that everybody has to access and that if individual aircraft are out of sequence, everybody else is held up in the queue. Traditionally, individual aircraft have been de-iced on stand. That does not mean that anybody is waiting for anybody else in a line. I absolutely accept that different airports with different configurations have different infrastructure. We were a bit surprised by that. To clarify, there could not have been any expectation that sort of provision would have been made available on the day. Perhaps that is where some of the confusion about infrastructure not being available on the day arose-----
Ruairi Ó Murchú (Louth, Sinn Fein)
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In fairness, I do not think that is the claim that was made. The representatives form Aer Lingus stated that this is something that is in existence and works in other airports. As Mr. Harrison said, however, there are contrary views on that matter.
Can I quickly ask-----
Gerry Horkan (Fianna Fail)
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Deputy Ó Murchú can ask me rather than ask the witnesses because he can see that I am a people person.
Ruairi Ó Murchú (Louth, Sinn Fein)
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I have. I was able to look inside the Acting Chair's heart. Apologies about earlier. My son was up on work experience. I am not sure what work and what experience - I would not ask him - so I had to take him for lunch.
Gerry Horkan (Fianna Fail)
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Did Deputy Ó Murchú welcome him officially?
Ruairi Ó Murchú (Louth, Sinn Fein)
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That was another failing of mine, but there are many. He may not thank me for this interlude.
Does the DAA deal much with the likes of Bus Éireann? I will raise a very local issue, namely, the 100X bus route from Dundalk. I have been over and back with Bus Éireann, which has stated that it cannot maintain the timetable as it exists at this point and that it will come up with a timetable that it can deliver upon. This is meant to happen in the very near future. That is something we will chase up. One of the issues a constituent who contacted me raised is the fact that the 100X bus stop does not cut the mustard when the weather is bad. There are particular issues with regard to queuing, and these relate to Bus Éireann. My question relates to the interactions the DAA has with the likes of Bus Éireann and what it would be necessary to put in place some sort of bus stop structure that would be more fit for purpose.
Gerry Horkan (Fianna Fail)
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I would not expect Mr. Jacobs to be. I would have been utterly shocked if he were.
Ruairi Ó Murchú (Louth, Sinn Fein)
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There have always been issues with the route. This meeting is not the place to deal with the timetable, but the constituent in question also said that on one occasion it took 50 minutes to get on the bus at the airport. That is Bus Éireann's queuing process and whether it is the right bus or not. I am interested in what interaction would the DAA has with Bus Éireann. There is also the issue of the bus stop at which people are not protected from bad weather.
Mr. Kenny Jacobs:
Bus Éireann is part of the system, so we to have interactions with it. We can take a look at the bus stop and how what happens when it rains, but we cannot make any promises. We can take that matter away with us. As part of the system, we want, as with all the services on offer, to have an effective product for the customers that use the service.
Gerry Horkan (Fianna Fail)
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The committee can bring representatives from Bus Éireann back in again soon and the Deputy can quiz them on that.
Ruairi Ó Murchú (Louth, Sinn Fein)
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I have no doubt about that. I accept there was a level of unfairness in the question, but is that not the nature of these committees?
Gerry Horkan (Fianna Fail)
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Here we are three hours later. The witnesses thought they were nearly out the door earlier.
I wish Mr. Jacobs the very best of luck in his new role and in dealing with his largest customer, namely, his former employer. I am sure he knows its way of operating particularly well. I thank Ms Gubbins and Mr. Harrison for their contributions. It is clear that all the witnesses have an in-depth knowledge of their briefs. I thank them for being here and wish them all the best for the future. I look forward to travelling through the airport in the not too distant future. I am sure the committee will see the witnesses again. We will take on board their comments, especially those relating to the regulator. We may address the matter with the regulator directly or with the Minister as we move through our work programme over the coming months.
The committee is adjourned until 4 p.m. next Tuesday, 24 January, when it will reconvene for a private meeting