News: Ryanair want their own terminal for Dublin flights
Flights > News > # 995 (04/10/2006)
Ryanair is so angry at the predicted cost of a new terminal at Dublin airport that it has offered to build a cut price alternative.
The Dublin Airport Authority (DAA) is set to build a state-of-the-art €395 million terminal capable of handling 35 million passengers per year and spend a further €205 million on infrastructure, but Ryanair says it can get the job done for just €250 million. The no-frills giant has also promised to keep Pier C, which was only opened seven years ago, and save the listed Corballis House building.
Ryanair says it will try to block DAA’s plans; the airline claim the proposed facility is badly designed, poorly located and far more expensive then similar projects in the UK and Europe. They also fear “spiralling costs” will be passed on to passengers, but DAA argue the new terminal will provide a cost effective and contemporary gateway for Ireland. DAA chairman, Gary McGann, said: “T2 will be a bright, modern building designed specifically to meet travellers’ needs. It will feature large airy spaces in areas such as check-in, baggage reclaim, security and the departures lounge. The terminal will also have dedicated facilities to meet the needs of business travellers and families travelling with young children.”
Ryanair chief executive, Michael O’Leary, is not convinced though and says DAA cannot be trusted to build efficient, low cost facilities.
“Having wasted €150 million on Pier C in 1998 they now propose to scrap it. Having spent a further €150 million extending the terminal in 2002 to cater for 20 million passengers this summer’s experience has proven that the facilities cannot handle 20 million passengers,” he said.
Mr O’Leary added: “When there is an alternative T2 proposal which can be built at no cost to the DAA, and can be built with no increase in passenger taxes at Dublin Airport, Ryanair calls on the Government to ensure that this is the facility that is developed at Dublin Airport and to scrap the Taj Mahal proposed by the DAA.”
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Comment:
There is nothing new here about Ryanair having a dig at an airport, but how far will Europe's most successful budget airline want to go towards actually operating its own terminal at one of its most important bases?
All of the European no-frills airlines base their business model on the US cheap flights pioneer Southwest. One of the oft repeated mantras of Southwest founder Herb Kelleher is to keep a laser sharp focus on what each company does best, and there is no questioning the fact that Ryanair have been extremely good at extracting profits from the flights they run.
As a large proportion of Ryanair's profits now come from the sales of additional products beyond the flights themselves, is it a logical step forward for them to want to start making a profit from an airport terminal itself, as well as from commissions gained from car hire sales and hotel stays?
Airlines and airports traditionally had very cosy relationships back in the days of state run aviation industries, but cases of private airline and airport tie-ups have been much rarer. Normally, these have come about because the airport owner has needed an airline to sustain the airport's viability (e.g. Air Southwest at Plymouth, not to be confused with Southwest airlines above), Thomsonfly parent company TUI taking over the lease of Coventry airport in order to provide the necessary finances to deal with the legal challenge the airport faced to get planning permission for a new terminal, or the disastrous attempt by the Plane Station group to prop up Manston airport by throwing cash into EUJet.
Ryanair have already agreed to invest the modest sum of $10 million into a low-cost terminal at Bremen airport, so what’s different about Ryanair's proposals for Dublin? Aside from the scale of the project - Ryanair's proposals would still set them back €250 million - there is clearly plenty of room for politics to get involved. We have already seen the huge cost overruns at Cork airport, so it is no wonder that Ryanair are getting so agitated about the much larger proposals for expansion at Dublin.
Whether or not Ryanair get their way remains to be seen, but the airline is very well aware that running airports can be an extremely profitable business, especially when they know that they can guarantee that Ryanair's flights alone will fill the new terminal, and that the company is not going to screw itself over for an attractive deal. Property has almost always been a secure investment, so with the amount of cash reserves Ryanair have in the bank, why not invest some of this in an airport property project?
