IN RECENT WEEKS, there have been several reports of “unavailable” and “really expensive” car parking spaces at Dublin Airport. DAA has also suggested that passengers without a car park booking should consider alternative options to get to the airport such as a bus or taxi.
However, some travellers have complained that the airport is not well served by public transport and that they are being forced to leave their car elsewhere in Dublin and take a taxi or bus to the airport.
To mitigate some of the issues, DAA has issued a further 300 taxi permits to and from the airport (an increase of 20%). However, the biggest issue is the proposed acquisition by the DAA of QuickPark, a privately-owned car park near the airport, which would immediately add over 6,000 additional spaces for cars.
The case
On 23 March, the Competition and Consumer Protection Commission (CCPC) was notified of the plan by Dublin Airport’s owner (DAA) to buy a car park privately owned by property developer Gerry Gannon.
The site, located between the Old Airport Road and the Swords Road in Santry, includes 6,122 car spaces and was run by transport entrepreneur John O’Sullivan’s QuickPark until 2019. After a legal dispute between Gannon (whose debt is controlled by NAMA) and QuickPark, the car park was placed on the market for sale in 2022 for €70 million.
The CCPC is currently investigating DAA’s proposed acquisition, and it requested further information just over three months ago (4 May). Once this is information has been received, the CCPC will investigate and can either make a final decision or proceed to a full investigation which can take up to 120 working days.
In assessing a merger or acquisition, the CCPC will consider several factors to determine whether it is anti-competitive or if it would harm consumers. These may include market concentration, pricing practices, consumer choice and overall market competition.
Market concentration
Defining the relevant market is the first step in assessing market concentration. DAA currently has 22,350 car parking spaces. However, the relevant market likely includes nearby hotels which offer parking and airport shuttles without requiring hotel stays. Three main hotels appear to offer this service: the Clayton Hotel Park and Fly (1,500 car park spaces), Santry’s Crowne Plaza Hotel (300 spaces) and Carlton Hotel Dublin Airport. If the market is defined in such a way, the three hotels have around 7% market share, QuickPark represents 20% of the market and the DAA has 73% of the market. And either way, whether or not the CCPC includes the hotels in the relevant market definition, if the acquisition is allowed DAA will virtually control all the parking at the airport.
Pricing level
DAA operates a dynamic pricing system, which means that when demand is higher, so is the daily rate at the airport. However, the long-term car park (18,600 spaces) has a daily price cap of €15, and prices vary from €8 to €15.
QuickPark has been closed since 2019 but a comparison can be made with the hotels offering airport car parking. Santry’s Crowne Plaza is currently charging around €30 per day, whereas the Clayton and Carlton charge €14 and €10 per day, respectively. In comparison with these, the DAA’s long-term car park prices are not disproportionately high. The DAA’s short-term car park is currently charging around €40 per day but it is the only option which does not require a shuttle bus.
Potential anti-competitive effects
Allowing DAA to own around 93% of all airport car park spaces – in practice, a monopoly – could lead to anti-competitive effects and harm to consumers.
Firstly, monopolies generally limit competition, leading to higher prices and reduced consumer choice. Allowing multiple car park operators at Dublin Airport can promote competition, potentially leading to more competitive pricing, improved services, and increased consumer choice.
Secondly, lack of competition tends to decrease innovation and improvements in service quality. A second operator (even if only with a 20% market share) may introduce new and/or improved services to differentiate itself and attract customers, which would be beneficial to consumers.
Pro-competitive effects
There are however some possible efficiencies from this acquisition.
Firstly, having a single car park operator (excluding the hotels which provide this service) may provide operational efficiency and better management. This can facilitate coordination (for example, in the shuttle bus service) and ensure that the quality of the service is consistent.
Secondly, the additional carpark would generate further revenue for DAA, which may be used to improve airport operations and/or infrastructure. This would directly benefit travellers.
These effects are significant, as airport carparks tend to be monopolies across different EU airports.
Now what?
The CCPC’s job is to investigate whether the potential positive effects of this acquisition (such as operational efficiency and further revenue that DAA can reinvest in the airport) can offset any potential anticompetitive concerns (higher prices, decreased choice, and lower service quality).
One alternative to allowing the acquisition is to impose some remedies to address the anti-competitive effects. This could include, for example, a competitive price cap on daily prices.
If the acquisition is denied, then other bidders previously involved in the sale may be able to buy it.
We will have to wait for a decision. However, while the CCPC’s review is ongoing, the carpark can still be operated by the owner (QuickPark) or a third party on a short-term lease.
Dr Catarina Marvão is an economist and lecturer at TU Dublin specialising in competition and regulation.
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