DAA Seeks Clarification on Ryanair’s Questionable Position Re Shannon Airport

The Dublin Airport Authority (DAA) confirms today (24 February) that it received a letter from Ryanair two days ago in relation to its operations at Shannon Airport.

The DAA finds both the timing and content of this letter to be rather peculiar. The Ryanair letter asked for a response by close of business on Friday, 4 March and the DAA will, as Ryanair requested, respond by this date.

On initial review however, we believe a significant number of elements within the Ryanair letter are unsustainable. Therefore, to better understand the Ryanair position, we have sought clarification in relation to a number of issues.

The unsustainable elements include the following:

• This is the first time that the DAA has been requested to pay an airline for delivery of passengers. Under the terms of the Ryanair letter to the DAA, it appears that Shannon Airport, which is currently loss-making, would have to pay Ryanair €4.20 for every passenger above what it claims to be the current level of Ryanair passengers using Shannon.
• Since Ryanair also wants the DAA to pay the charge for persons with reduced mobility at Shannon, the Ryanair offer could result in the airline being paid €4.70 for each passenger. That €4.70 fee would be paid to Ryanair both for Irish people leaving the country and for incoming tourists.
• Ryanair has indicated that it would pay no aircraft and landing charges for any passengers delivered under the terms contained in the letter.
• On top of being paid €4.70 for passengers, Ryanair has also asked the DAA to provide the airline with free offices, free check-in desks, a free crew room, free communications and other unspecified free facilities at Shannon.
• Ryanair has also stated in its letter that DAA would have to pay back a €3.7 million legal settlement that Ryanair paid the DAA less than six weeks ago. The payment was made by Ryanair to settle a High Court case that related to Ryanair failing to honour the commitments of its previous five-year agreement at Shannon Airport. Ryanair failed to meet passenger targets under this five-year deal at Shannon. Ryanair also failed to deliver the tourist numbers that it promised. When Ryanair launched the deal, it claimed that 80% of traffic into Shannon would be inbound tourists. However on many of the European routes that it operated, 80% of the traffic was Irish people travelling abroad and only 20% were inbound tourists.
• Ryanair’s letter claims the airline’s current operation at Shannon handles 300,000 passengers, and under the terms outlined it wants the DAA to pay it for every passenger above that level. However the 300,000 figure is more than 100,000 passengers below Ryanair’s current indicated traffic level at Shannon for this year. In addition, the one million passengers Ryanair refers to would not arise until 2016.
• Ryanair’s terms bears no relation whatsoever to any of the existing generous incentive schemes at Shannon, Cork or Dublin airports.

Ryanair’s claim of earlier today that the terms it has sought are the same as those currently available to Aer Lingus in Dublin is completely untrue. As a commercial organisation, the DAA does not pay any airlines for the delivery of passengers and is unaware of any airport that operates in this manner. Such a notion would be economically unviable for any airport. The DAA however provides a range of incentives for the delivery of new passengers at our airport, including discounts of up to 100% for new routes.

The DAA also questions why Ryanair chose to release selective details in relation to this issue to the media on the eve of the General Election and more than a week in advance of the airline’s own deadline for a response.

Ryanair contacted the DAA by fax for the first time in relation to this matter shortly before 5pm on Tuesday, 22 February. The DAA has sought clarification and will respond in full, as Ryanair has requested, by 4 March.

The traffic decline at Shannon Airport referred to by Ryanair over the past 12 months is almost entirely due to the withdrawal of Ryanair services, following the end of Ryanair’s previous agreement with Shannon, the terms of which Ryanair failed to honour. About 90% of the decline in passenger numbers is due to the significant reduction in Ryanair services.

Shannon Airport is focused on sustainable passenger growth. This has yielded a number of new routes in recent months. These include the establishment of Aer Lingus Regional services to Manchester, Birmingham, Glasgow and Bristol last summer and the commencement in December of a new Aer Lingus Paris-Charles de Gaulle service. A new daily Aer Lingus Gatwick service and a new Aer Lingus Regional Edinburgh will begin at the end of March.

Ryanair, despite the ending of its previous agreement, has expanded its presence at Shannon recently with the announcement in the last quarter of 2010 of the establishment of a new Fuerteventura service from February, as well as the reinstatement of Nantes, Malaga and Palma-Mallorca services.