A secret dispute between Dublin Airport and the aviation regulator over €14m in pandemic funding almost resulted in court action.
Correspondence reveals how the Minister for Transport was forced to intervene, saying he was concerned about the daa’slans to “nstigate legal proceedings.”
A letter, sent to the airport authority’ chairman, said the minister did “not consider it acceptable” that two state bodies would end up fighting over taxpayer money in court.
The documents detail a previously unknown row from 2022 over how special funding during Covid-19 was used by the daa.
They have only now been released following an appeal under Freedom of Information laws, which took almost three years.
Under a pandemic support scheme, the daa was granted two tranches of funding of €17.7m and later €79.6m to tide it over during a collapse in international travel.
The money was intended to be used to reduce the effective charges paid by airlines under the price cap to make it more viable for routes to continue.
However, both the Commission for Aviation Regulation and the Department of Transport said this had not happened.
Then Minister Eamon Ryan said it had resulted in a €14m “financial benefit” to the daa that would not have arisen without Exchequer funding.
A letter from Mr Ryan in April 2022 said: “Based on daa’s proposed treatment of the exchequer funding for 2021, daa will have collected the same level of aeronautical revenue from the airlines as they would have been able to do in the absence of government funding being provided”.
“Under this treatment the airlines receive no benefit from the €14m of the first tranche of government funding,” it added.
The letter argued that the discounts could only be meaningful if they reflected a discount on the price cap applying to airlines.
“Otherwise, daa collects the full price cap allowable plus the government funding provided – ie the airlines are no better off,” the correspondence said.
Mr Ryan said it was his understanding that legal engagement between the daa and the aviation regulator had now run its course.
However, he warned against any litigation between “two state bodies within [his] remit.”
The daa had earlier said their understanding was that they were allowed to use the funding to offer incentives to airlines to encourage flights in and out of Dublin.
They said this was how the money was used around charges for transfer buses, airbridge facilities, and passenger processing.
However, in a letter to Minister Ryan, the daa said they accepted his decision.
Their chairman Basil Geoghegan wrote: “We remain of the view that the factual, legal and regulatory position supports the approach we had taken to the treatment of the funds provided in Tranche 1”.
“However, in accordance with your ministerial instruction, the board will proceed to ensure that the €14m in government funding under Tranche 1 is provided as an incremental benefit to the airlines,” he said.
Mr Geoghegan also said that the decision would lead to a €14m increase in their loss after taxation for 2021.
Asked about the discussions, a Department of Transport spokesperson said €103.8m of government funding was provided to Irish airports as damage compensation measures relating to the pandemic.
The spokesperson said: “The intention of the funding was to put state airports in receipt of funds to compensate for damage caused by Covid-19, so that the airports could, in turn, provide incentives and financial supports to airlines to restore connectivity”.
“This government funding was used to provide incentives directly to our airline customers during 2022, and the funds were recognised in the profit or loss account on a systemic basis over the period in which the discounts and incentives were provided,” they added.
Reporting by Ken Foxe
