IAA Increases Airline
Terminal Navigation Charges
August 2, 2010 -
The Irish Aviation Authority (IAA) has announced the termination of the
six month freeze in the Terminal Navigation Charge billed to airlines
for take-off and landing services at
Due to the
difficult economic climate in which the airline industry is currently
operating, the charge, which was approved by the Commission for Aviation
Regulation last January, was frozen by the IAA until June 30, 2010 at
the 2009 charge of €2.53 per ton.
The IAA generates its revenue from the aviation industry, in particular from airlines, and does not receive any Government funding. As a self-financing organization, the IAA has an obligation to recover its costs from the airlines.
Mr. Denis Daly,
Chief Financial Officer, IAA, said that the IAA froze its charge for the
six months to 30th June in order to give the airlines some "financial
breathing space" in difficult economic conditions, however IAA could not
continue to offer such a freeze indefinitely.
that any increase will create additional financial pressure for
airlines. We regret therefore that we have no alternative but to
introduce the increase authorised by the Commission," he said.
The charge for
terminal navigation services is based on the regulated capital and
operating costs of the Authority and also forecasts of traffic at
The increase in the charge is €0.83 (83 cent) per ton and is made up of an element relating to actual traffic being lower than forecast: €0.21 (21 cent) for the fall in 2009 traffic, €0.22 (22 cent) for the expected fall in 2010 traffic) and also €0.40 (40 cent) for the completion and bringing into operational use on 20th October 2009 of the new visual air traffic control tower at Cork.
The Irish Aviation
Authority (IAA) is a commercial State-sponsored company that provides
terminal air navigation services, the costs of which are charged to
airlines using the airports at
The Commission for
Aviation Regulation, in accordance with Section 7 of the 2001 Aviation
Regulation Act, is required to make determinations governing the maximum
charge that can be levied by the Irish Aviation Authority at
The price cap
formula provides for an equal sharing of the volume risk between the
Authority and the industry. Thus, when traffic falls, the impact of
falling traffic is shared equally by the Authority and the industry.
Similarly, were traffic to increase, the gain would be shared between
the Authority and the industry. This has an impact on the 2009 rate of
€2.53 per ton which was €0.21 (21 cent) per ton too low due to the fall
in traffic in 2009. Similarly, the estimated traffic fall in 2010 has a
volume sharing impact estimated at €0.22 (22 cent) per ton.
The price cap also
reflects the completion and bringing into operation of the new visual
air traffic control tower at
The IAA generates
about 90% of its revenue from air navigation services provided to
airlines in over 451,000 square kilometers of Irish-controlled airspace.
Up to 90% of all flights from Europe to
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