The Dublin Airport Authority (DAA) has been in dispute with Fingal County Council over the utilisation of the new parallel runway at the airport. Fingal County Council is seeking to impose limits on flights in the early morning and late at night.

The DAA – and the airlines – are resisting. The DAA has been arguing that a noise quota would be a more rational policy than a numerical restriction on flights. (Full disclosure here: the writer was a member of the DAA board while the runway project was in train.)

Fingal County Council is the responsible agency for noise monitoring and local residents, especially around St Margaret’s to the west of the airfield, have been complaining about increased noise levels.

The council had sought to impose conditions on the operation of the new runway, and on the airfield generally, as part of the original planning permission granted to the DAA.

Late on Tuesday evening, however, the High Court granted the DAA permission to challenge the decision by Fingal County Council, so for the time being at least these flights can continue.

Runway success

The new runway cost €320m and came in on budget. Runways are relatively straightforward pieces of infrastructure and rosettes should not be awarded too liberally, but amidst the current tsunami of overshoots on the capital programme, it is worth noting that there are occasional successes.

The credit is due to the foresight of airport management 40 years ago when adequate land was acquired, meaning that the runway could be accommodated entirely on airport property.

It is, as far as I am aware, the cheapest runway completed at a large European airport in recent times; there were no property acquisition costs.

In comparison, the new runway at Heathrow, if it ever gets built, will entail the demolition of a large slice of west London suburbs at a cost running to several billion pounds.

Opponents of airport expansion in Europe have deployed an environmental argument in addition to residents’ concerns about noise at night.

Aviation is responsible for about 3% of total emissions worldwide and its growth, they argue, should be constrained as part of the response to climate change.

This is an example of using every policy instrument in sight without considering the alternatives, including alternatives which might have lower economic costs.

The aviation sector is hard to de-carbonise for technical reasons, unlike private car transport which is already transitioning to electricity, courtesy of battery technology.

New sources of propulsion for aircraft are a long way off. But in the meantime a more economically efficient option would be a review of taxation policy as it affects aviation.

There is no value-added tax on airline tickets, about 90% of which are purchased by travellers who cannot claim the VAT back. There is no excise duty on jet fuel either.

This indulgent policy dates back to the 1940s and is enshrined in international agreements which are difficult to change. The European Commission would like to move in this direction but there has thus far been limited support from member governments.

Airline tickets would be roughly 30% dearer with VAT and an excise on fuel that reflected the emissions – and would depress demand by roughly the same percentage, according to some studies. It would be hugely disruptive to impose both tax changes suddenly but it is hard to argue against a phase-in over a number of years.

Airline tickets are one of the few discretionary items that are free of VAT – most European countries charge 20% upwards – and charging excise on petrol and road diesel while exempting jet fuel makes little sense.

It is essentially an accident of history that aviation gets a free ride from indirect taxes.

The airlines will not welcome such a tax policy change but they will not welcome arbitrary restrictions on airport utilisation either. One of the advantages of the second runway at Dublin is the facilitation of transatlantic connecting traffic, where Aer Lingus has been making progress.

With two runways, it is far easier to juggle connecting times and the airline has been winning traffic from competing hubs in Britain and Europe.

Some of the apparent traffic growth at Dublin is illusory to the extent that the trips have been diverted, not created anew. The earth has just one atmosphere, and purely national climate change policies ignore this important reality in aviation, as they do in agriculture.

Airline economics requires that expensive equipment is used intensively. Early departures and late returns make the sums add up for Aer Lingus and Ryanair, which have large fleets based in Dublin.

A plane barred from early take-off and late return might manage three round-trips a day instead of four, meaning that your effective fleet is one-quarter smaller.

When a new short-haul aircraft can cost up to $100m, it is easy to see why the airlines, as well as the DAA, hate restrictions on runway availability.