Sean Barrett (Independent) | Oireachtas source

I move amendment No. 10:

In page 37, between lines 6 and 7, to insert the following:“Statistics of airport performance
44.The Minister shall cause to be published statistics of the international price competitiveness of Irish airports, the efficiency of their capital and operating expenditures and such other performance indicators as the Minister deems appropriate.”.

This amendment arose from our discussion on Committee Stage of the terminal in Cork and the earlier reviews of issues, such as low labour productivity in Dublin and Shannon airports and the tendency to invest ahead of needs, thereby leaving the airports with capital debts. We discussed the kind of data that the Department and this House require to determine whether airport investments are efficient. Such data might include passenger numbers and workload units per employee; operating costs and capital costs per workload unit; aircraft movements per employee and per runway; and passengers per airport gate and per square metre of terminal. In our previous discussion, the Minister indicated that he saw a need for these data. We were keen to locate the data centre in the Commission for Aviation Regulation but we did not insist on it. The Minister indicated that he might locate it in his Department and he mentioned improvements that have been made to his Department's data, particularly in respect of the independent bus sector. We might also have required the port companies to include some of these measures of efficiency.
Part 7 of the Bill is titled "Miscellaneous Amendments - Airports". This is why we propose inserting the amendment into this Part. The Minister has made interesting proposals on parking, clamping and the duties of directors. He also acknowledged the need to ensure that airports are efficient performers in a world where airlines compete strongly. We recognise there is a need for statistics. He referred to the aviation strategy on which his Department is working. Given that the data could have helped us to avoid the kind of Celtic tiger mistakes that were made in the airports and the legacy with which he is now wrestling, we should collect these statistics. The amendment allows the Minister to cause to be published statistics on whether airports are price competitive with their international counterparts, whether they invest efficiently and whether their operating costs are efficient, as well as "such other performance indicators as the Minister deems appropriate."
Since we commenced this debate, which I have found most useful, the Commission on Aviation Regulation reported on 29 May. It has required a substantial reduction in the maximum charges levied at Dublin Airport. One might argue there were inefficiencies that had to be wound out of the system. I estimate there will be price cuts of slightly under 22% in the next five years because of the excess costs found in the airports. Would these excess costs have been identified in advance if we had the data bank that we propose in the amendment? The report states that only €773 million of the €925 million cost of the new terminal in Dublin would be allowed and that €31 million in capital expenditure and just over half of the DAA's proposals were disallowed. In another case €183 million was disallowed. The report suggested that the production of this infrastructure seems to have taken over as the object, with the result that goodies were offered to the airlines without telling them that it was going to cost much more to run the airport. All of us would like marble halls.
The report identified a legacy staff problem in terminal 1 at Dublin Airport and that staff costs increased substantially between 2007 and 2009, while the rest of us were in a recession. Information technology costs amounted to 5.8% of revenue, compared to the European average of 4.3%. Operating costs were 25% higher than all airports according a sample study by Booz which was commissioned by the airport.

The Minister, the Oireachtas and the public need to beware of people bearing airport terminals, high expenses and high operating costs because they damage the competitiveness of the Irish economy. As we found in the Shannon case, with the precipitous drop in traffic - the Minister mentioned 61% - it damages tourism. Where a market is dominated by one company, and this one is dominated somewhat less because the Minister has given Shannon its freedom, we still need to know here, at Cabinet and in the Minister's Department how efficient these airports are. We also need to know whether their labour and capital productivity are up to the mark.

The Minister has recognised the data requirements for that. I think the case is strengthened by the report on 29 May 2014 from the Commission for Aviation Regulation. The data would be useful in decision-making but we will leave it to the Minister as to where he might like to publish them. The need for more data was accepted by all sides on the last occasion. The Central Statistics Office was also mentioned as a possible place to publish the data.

We will make better and more informed decisions if we are able to answer the kind of questions that are posed in various reviews of Irish airports as regards the tendency to over-invest and incur operating costs which are in excess of those elsewhere in a very competitive aviation market. Having the data somewhere, either in the Department's annual report, in the aviation strategy, or through using the CSO or the Commission for Aviation Regulation, would enhance public decision-making in an area where it is needed. One of the reasons for the Bill is to deal with certain legacy problems of excess expenditure and costs in the past.