New report suggests privatisation for Ireland’s airport terminals, but Dublin aside, are they big enough to get investor attention?

A new report for the Irish government suggests that airport terminals, not only at Dublin, might be privatised.  The review of Ireland’s state airports, published by UK consultancy Oxford Economics, highlights the development needs at the country’s Dublin Airport, but also indicates that there is scope for the privatisation of terminals across the country to provide greater competition. However, while privatisation usually increases competition the entire Irish aviation sector might be too small for that, certainly outside of Dublin.


  • A new report for the Irish government suggests that airport terminals, not only at Dublin, might be privatised,  but many may be too small to attract investors;
  • The review of Ireland’s state airports, published by UK consultancy Oxford Economics, highlights development needs at the country’s airports;
  • Despite some Irish airports ending commercial service there are too many of them and they are not all in the right place.

Looking at Dublin Airport first, the report offers the view that it does need a second runway and a third terminal – both of which are being debated now – as it forecasts 54 million passengers annually at Dublin by 2050. The runway has greater priority with the government. It goes on to suggest that an independently owned and operated third terminal would be an “appropriate response” to anticipated growth and that it would be required by 2031.

Independent ownership of the existing second terminal and a projected third one has been aired by Ryanair, which has suggested that it might partner with an airport operator to construct what would essentially be a budget terminal, at reduced cost.

Aer Lingus has offered its view on the future of the EUR1.2 billion Terminal 2, of which it has spoken in terms of “owning”, but probably only in respect of being the anchor tenant. If a third terminal is not built than Aer Lingus’s desire to keep competition out of that terminal might possibly only be supported by it taking ownership control.

CHART – Dublin Airport’s Terminal 2 is used by Aer Lingus and a small number of other airport users including American Airlines, Delta Air Lines, Emirates, Norwegian and United AirlinesSource: CAPA – Centre for Aviation and OAG (data: w/c 22-Oct-2018) 

But it is what Oxford Economics said about the regional airports that really stands out. It projects Cork Airport will handle 4.6 million passengers per year and Shannon Airport 3.8 million by 2050 and recommends that new facilities, such as boarding gates and baggage handling services, will be required at both airports to accommodate this growth.

It is the indication that there is scope for the privatisation of terminals that is most interesting. This can be interpreted in two ways. Either, privatise terminal operations at Shannon and at Cork, or, introduce additional terminals at those airports, to compete against each other in situ. The latter option seems unrealistic when neither airport will go beyond five million ppa in the next 30 years.

But even competition between airports looks to be unrealistic. The problem is that Ireland has too many commercial airports.  A CAPA – Centre for Aviation report from back in 2010 (see ‘Poor future prospects for Irish regional airports – any opportunity for a private sector saviour?‘) questioned “are there too many Irish airports?” Since then, Galway and Waterford airports have lost scheduled service and Connemara might without government intervention, though Kerry has survived.

The same report asked what prospects there were for private investors. It found that Irish regional airports would find it hard to survive without government subsidies and that it was equally hard to imagine what benefits investors would perceive to be realisable if they were to invest in them, especially the smaller ones.

A new CAPA report this week questions what could be done to improve Ireland’s air connectivity that could involve both public and private sectors? It suggests potentially a second airport for Dublin, perhaps a STOLport such as those in London and Belfast, or a new airport serving the eastern side of the country between Dublin and Cork, home to the country’s greatest population density. A significant expansion at Waterford could be an option to support the second scenario.

While all these proposals may be fanciful to a degree, it is proposed that they should be considered in any government forecast of supply and demand so far ahead (to 2050) alongside the suggestions to privatise individual terminals at existing airports.