2nd runway at Dublin airport threatens Heathrow’s position as main IAG hub

Heathrow may face more competition for hub traffic from Dublin, if there is a 2nd runway in 2020 – and airlines prefer using Dublin rather than Heathrow.  This might mean Heathrow being partly sidelined.  In May 2015 Aer Lingus, the Irish flag carrier, was bought by IAG (International Airlines Group) – which owns British Airways.  As part of IAG’s takeover there was the benefit of new routes and more long-haul flights from Dublin, where Aer Lingus is one of the two main airline customers, along with Ryanair. Willie Walsh, IAG’s CEO, said in 2015 that owning Aer Lingus would allow IAG “to develop our network using Dublin as a hub between the UK, continental Europe and North America, generating additional financial value for our shareholders”. Willie Walsh believed that buying Aer Lingus was a wise move, as it was “inevitable” that Dublin would get a 2nd runway in the next few years.  IAG believes that it can expand the group’s flights via Dublin or Madrid – especially if there is no new runway at Heathrow.  It could have the impact of removing business from Heathrow – British Airways is the largest airline there with around 50% of the slots. 
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Heathrow faces competition from Dublin

By Vincent Boland in Dublin (Financial Times)
7.4.2016

London Heathrow is to face more competition in the battle among Europe’s hub airports after Dublin said it would build a second runway by 2020.

As the UK government continues to postpone a decision on whether to build a third runway at Heathrow, the announcement on Thursday by the Dublin Airport Authority will fuel the debate over whether London’s hub risks being further sidelined by the delay as rival airports move ahead with expansion plans.

The announcement comes a year after Aer Lingus, the Irish flag carrier, was bought by International Airlines Group.  IAG owns British Airways, and as part of its takeover proposal it promised new routes and more long-haul flights from Dublin, where Aer Lingus is one of the two main airline customers, along with Ryanair.

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Full FT article at

http://www.ft.com/cms/s/0/0de6dd58-fcd3-11e5-b3f6-11d5706b613b.html#axzz45SyYMNWg

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The significance of a second runway at Dublin is that it gives Willie Walsh even more of an alternative to a 3rd runway at Heathrow.  After the Dublin runway plans were dropped in 2010, Walsh set in train his alternative:  link up with Madrid and the new routes that offered (particularly to South America, the one continent not well served by Heathrow); buying Heathrow slots of other airlines (which he could convert to long-haul should the market be there) and expanding his base in Dublin.


Earlier:

IAG given clearance by Irish government to buy its 25% shares in Aer Lingus takeover

International Airlines Group (IAG), the owner of British Airways, is set to take over Aer Lingus in a deal that values the airline at €1.4bn after the Irish government agreed to sell them its 25% stake.  The Dublin government’s agreement to sell their stake was critical for the deal to progress. Donohue said: “IAG has provided additional information and certain commitments in relation to its proposal.” IAG has further extended guarantees about routes to Ireland from Heathrow, from five to seven years, although they remain some way short of the decade-long commitment Dublin had sought. The guarantees also are dependent on airport charges being limited to inflation.  The government has secured important guarantees on the maintenance of Aer Lingus’ iconic brand, and its head office staying in Ireland. There are also some assurances over protecting existing Irish jobs at Aer Lingus, which wants to continue to use Irish crew bases. Ryanair still owns 29% of Aer Lingus shares.  About 46% is owned by Aer Lingus. The 24 landing slots Aer Lingus controls at Heathrow are among the most lucrative for BA. The Heathrow-Dublin link is one of the busiest in Europe, and highly profitable.  

http://www.airportwatch.org.uk/2015/05/iag-given-clearance-by-irish-government-to-buy-its-25-shares-in-aer-lingus-takeover/

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Dublin Airport may buy 40 homes, already badly affected by noise, in bid to step up 2nd runway plans

Dublin airport was given consent for a 2nd runway in 2007, but due to the recession it was not started. There are now plans to start work in 2017, for completion in 2020, though as much has changed in the years since 2007 on the aviation market, questions are asked about whether the original consent should still be valid. Due to the inevitably increased noise from the 2nd runway, it is likely that around 40 houses (mainly in the St Margaret’s area 2-3km from the airport) would be bought by the airport, and negotiations are planned. Triple glazed window insulation will probably also be suggested for hundreds of other properties including schools. A spokeswoman for the St Margaret’s Concerned Residents Group said the affected 30 home owners in her association are devastated but have no choice. The airport has assessed the level of noise necessitating house purchase based on 90 days of the airport’s busiest months from June to September. Residents, some of whom have been in the area for three generations, fear that a 2nd runway, with increasing frequency, growth in long haul services and more larger aircraft Dublin would compound the noise problem. The 40 homes are those affected now.  (There would be a whole lot more with a 2nd runway).

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See also

Heathrow rules out IAG using Dublin as a third runway

By Joel Lewin and Peggy Hollinger in London (Financial Times)

23.2.2015

Heathrow has dismissed suggestions that Dublin could act as a so-called third runway for International Airlines Group, a key argument in IAG’s contentious €1.4bn bid for Aer Lingus.

Advisers to the UK-based airline group have argued that it can expand Aer Lingus by redirecting some transatlantic passengers through Dublin airport, which would free up capacity at London’s congested hub for other routes.

But such arrangements would not relieve the pressure on Heathrow, said John Holland-Kaye, chief executive of the UK’s largest airport, which is campaigning to build a third runway.

“Dublin is a great airport, but if you look at what London needs — more long-haul connections to growing global markets, more export capacity — there is only one solution. To expand Heathrow. Dublin won’t do it, Gatwick won’t do it.”

British Airways, IAG’s flagship airline, is the largest carrier at Heathrow, which is operating at near full capacity on its two runways.

Aer Lingus is based at Dublin airport, which has one runway and, unlike Heathrow, some spare capacity. Gatwick, the UK’s second-largest airport, also has one runway, but wants permission to expand because it is busy at peak periods.

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full FT article at

http://www.ft.com/cms/s/0/17aec442-bb41-11e4-a31f-00144feab7de.html#axzz45SyYMNWg

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Work to build Dublin 2nd runway could start in 2017 for completion in 2020

Dublin airport is to press ahead with building a 2nd main runway, resurrecting plans that were approved in August 2007 but then put on hold when Ireland was plunged into financial crisis after 2008. The 2 mile runway will be cost about €320 million (£258m) with work starting in 2017. It may be ready by 2020, to meet rising demand. Passenger numbers at Dublin are now back up to where they were before the recession, and although the airport is not yet at full capacity, it is congested at peak hours. There were around 25 million passengers in 2015. Passenger numbers are expected to rise further. Dublin to London is one of the world’s busiest international air routes, while the facility to pre-clear US immigration in Ireland has made Dublin popular with transatlantic travellers. Ireland cut is small charge of €3 on air tickets in 2013, while Northern Ireland continued to charge £13 in APD. Many people therefore travelled from Northern Ireland to Dublin, to save money. Ryanair has over 40% of the flights at Dublin backs the runway, as does IAG. Willie Walsh has said he might consider using Dublin more if Heathrow got a 3rd runway, and raised charges sharply. There are some conditions restricting night flights very slightly, (65 per night 11pm to 7am) with the 2nd runway.

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