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Ireland risks losing 1,000 aviation jobs and €500mn in tourist spend and other investment because of a cap on passengers at Dublin airport, its operator warned, adding to fears that infrastructure bottlenecks are throttling the country’s growth.
Kenny Jacobs, chief executive of Dublin Airport Authority (DAA), told the Financial Times that in a country already struggling with a chronic housing crisis, strains on the electricity grid and severe planning delays, the limit on passengers “just looks chaotic”.
His comments came as the airport announced it was set to exceed the 32mn passenger annual limit imposed in 2007 for the first time this year, by 1mn, due to “record-breaking demand” for travel. “This has gone beyond a transport issue. This is now an Ireland issue,” Jacobs said.
DAA said it had made “extensive efforts” to reduce passenger numbers to comply with the cap, which was designed to ease congestion on nearby road links, but was still expecting 33mn travellers this year. The group has applied for permission to raise the annual limit to 40mn passengers, not counting those in transit, and said current demand stood at 37mn.
Jacobs said the “outdated cap” created “uncertainty around inward connectivity . . . it’s another black mark on foreign direct investment in Ireland”.
Ireland, a small open economy, owes its economic success to a decades-long focus on winning foreign direct investment, with the European headquarters and large operations of major US, European and Chinese tech and pharma companies based in the country.
Because of the cap, Dublin has had to reject requests from seven airlines to increase slots, including two US carriers and two European low-cost airlines. “That’s a pity because we need that connectivity for FDI,” Jacobs said, noting Ireland lacked connections to much of South America and Asia.
“Airlines are going to say, ‘you know what, Dublin’s just too complicated. While this cap exists, we’re just going to go elsewhere,’” he added.
Ireland’s Ryanair, Europe’s largest airline, has slowed its growth plans in Dublin because of the passenger cap, and has previously said it deployed three aircraft and more than 200 jobs to southern Italy rather than Ireland this summer as a result.
Jacobs’ stark assessment came after Ireland’s main business lobby, Ibec, warned that the country risked becoming complacent.
In a document issued ahead of a widely expected general election this autumn, Ibec said Ireland’s airport infrastructure “needs to be capable of handling future demand . . . without unduly restrictive passenger caps and planning conditions such as those now impacting on Dublin Airport”.
Jacobs said shedding 1mn passengers to meet the cap threshold would translate into a loss of 1,000 jobs across airlines, handlers and other staff — and a €400mn to €500mn drop in visitor spend.
“You’ll also be talking about a couple of thousand tourism jobs that will not exist next year, that did this year, because of a million passengers coming out of Dublin airport,” Jacobs said.
Jacobs said DAA had removed incentives for airlines to use Dublin, in a bid to suppress passenger numbers to the 32mn limit. He added that without the cap, the airport could comfortably handle 40mn passengers a year.
UK and European airports would reap the benefits of constrained numbers in Dublin, Jacobs said, noting that a cap at London City Airport had been lifted, Stansted has been given permission to expand and Gatwick and Luton are also seeking to grow.
“The UK is driving ahead on adding aviation capacity, as is Poland, as is . . . the Netherlands . . . Because we’re complacent on planning and infrastructure, we’re now really in danger of falling behind. Capacity will go elsewhere . . . and if it does, it’s really hard to get it back,” Jacobs said.
Amsterdam’s Schiphol airport last year was forced to bow to pressure from airlines, the EU and US governments and drop plans to reduce flights on environmental grounds after the US threatened countermeasures.
Jacobs feared US tit-for-tat measures could be expected again. “It just looks chaotic from the outside that a country that has a reputation of being outstanding at aviation is so slow at sorting out the passenger cap,” he said.
Additional reporting by Philip Georgiadis