Market News

By Olivia Fletcher

(Bloomberg) -- Dublin airport is set to breach an annual 32 million cap on passengers that was imposed by Ireland’s planning body for the first time, its operator daa has forecast.

The condition was set by An Bord Pleanála over 15 years ago as part of the planning permission that was granted for a second terminal at Dublin airport, due to concerns about road infrastructure into the airport. 

“Ireland’s falling behind on this, and the quicker we catch up, the better. We’ll continue to do our very best to comply with the planning cap, but we know that there’s demand out there next year for 37 million from the airlines,” daa’s chief executive officer Kenny Jacobs said in a phone interview.

As of the end of August, passenger numbers trended 5.5% ahead of 2023, a trend daa forecasts to continue into September. A total of 31.9 million passengers passed through Dublin airport in 2023, according to daa.

The airport authority has requested to increase the passenger cap to 40 million a year via a planning application in December 2023. However, it is expected to take some time for a decision to be made while the planning board seeks further information. Plans have faced opposition from local residents. That’s creating an opportunity cost, Jacobs added, because of the uncertainty.

Stakeholders, including daa, Irish airline Ryanair Holdings Plc and Ireland’s business lobby Ibec, have called for action, arguing that the cap inhibits Ireland’s ability to grow as a foreign direct investment hub. “Sustainable growth of the airport will deliver benefits to the region and the wider economy,” Danny McCoy, Ibec’s chief executive officer, said in a statement.

The cap symbolizes infrastructure challenges facing the small island nation as decisions on everything from offshore wind, to homebuilding and expanding Dublin port are held up by bottlenecks in the planning system. Planning reforms are currently being ratified in the Irish parliament, while prime minister Simon Harris has proposed a new Department of Infrastructure to bring all planning issues under one roof.

The transport minister and former green party leader Eamon Ryan has yet to intervene, saying it is a matter for the planning board. That has irked some of those stakeholders, who counter-argue that lifting the cap should be a government decision, not a local council one.

Breaching the cap leaves all stakeholders involved in “unchartered territory,” Jacobs said, as the consequences are not yet clear.

“The passenger cap at Dublin Airport is an important issue for our business” Dermot Crowley, Dalata Hotel Group chief executive officer, said in a half-year statement Wednesday. “The ability of Dublin Airport to continue to increase passenger numbers is critical to support further growth in the Irish economy, particularly in the hospitality and tourism sectors which are a key source of employment for the island of Ireland.”