Centrus advises regulator on the financeability of Dublin Airport’s c. €2bn expansion

About The Commission for Aviation Regulation

The Commission for Aviation Regulation is an independent statutory body established by the Aviation Regulation Act 2001 and regulates certain aspects of the aviation and travel trade sectors in Ireland. The principal function of the Commission is to set the maximum level of airport charges at Dublin Airport.

Transaction Overview

Centrus undertook a review and analysis of information in relation to the preliminary price cap proposed under a draft determination published by the Commission in May 2019. The results of this review and conclusions on the financeability of DAA’s proposed €2bn expansion plan for Dublin Airport for the period 2020-2024 were provided to the Commission in a report, which was published on the Commission’s website beside its final determination on the price cap in October 2019.

Our Role

  • Centrus advised on appropriate thresholds for financial ratios and a target credit rating for Dublin Airport to enable it to access the debt markets at an efficient cost.
  • Advised on financial market conditions and general funder appetite in the sector to assist in assessing financeability.
  • Review of pricing model underpinning the price determination and scenario analysis to assess downside risks
  • Assessed S&P’s credit ratings methodology and developed an approach to assessing the credit risk of Dublin Airport’s regulated entity on a standalone basis
  • Provided advice on funder appetite for regulated infrastructure businesses and an assessment of market conditions for debt funding for issuers such as Dublin Airport
  • Provided recommendations on adjustments to the risk assignment in the final regulatory settlement to improve investor appetite.

“Centrus provided us robust, evidence based, responsive and timely analysis on Dublin Airport’s ability to finance its €2bn expansion plan. As the economic regulator of Dublin Airport, this analysis informed our final Determination of the maximum level of airport charges for 2020-2024.”

Dr Adrian Corcoran, Director of Economic Regulation – The Commission for Aviation Regulation

For more information, please contact Mark Taheny, Senior Director – Centrus