IAA Increases Airline Terminal Navigation Charges


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IAA Increases Airline Terminal Navigation Charges

Daniel Baxter

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 Cork, Dublin, and Shannon Airports. The new charge of €3.36 per ton will apply to all flights with a retroactive date of July 1st. 

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. 

"We understand 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 Cork, Dublin and Shannon Airports.  In calculating the charge per ton, the Commission for Aviation Regulation sets a maximum price cap taking into account the Authority’s regulated costs and airline traffic activity. 

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 Cork, Dublin and Shannon. The Authority is self funding and receives no financing from the exchequer. 

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 Cork, Dublin and Shannon airports for the provision of terminal navigation services. The increase announced last January was due to two main factors, which are part of the Commissions pricing formula. 

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 Cork on 20th October 2009.  The impact of the new tower at Cork is €0.40 (40 cent) per ton. 

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 North America fly through Irish-controlled airspace. The IAA generates 10% of its revenues from the regulation and monitoring of safety standards of civil aviation in Ireland. 

The terminal air navigation services provided by the IAA constitute about 14% of IAA revenue and are subject to a price cap determined by the Regulator.


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