Ryanair and Shannon Discuss 7

RNS Number : 1612B

Ryanair Holdings PLC

21 October 2009

 



RYANAIR & SHANNON DISCUSS 75% CUTS IN SHANNON BASE

DAA COST INCREASES AND GOVERNMENT'S €10 TOURIST TAX 

DEVASTATES TRAFFIC AT SHANNON AIRPORT

Ryanair, Ireland's favourite airline, today (21st Oct 09) confirmed that it has entered into discussions with Shannon Airport about the terms for an extension of Ryanair's 5 year base agreement at Shannon which runs out in April 2010.  Under the current 5 year agreement which was signed in late 2004, Ryanair has invested over $400m in Shannon Airport, and has grown its annual traffic at Shannon from 300,000 passengers in 2004, to 1.9m last year, prior to the introduction in April 2009 of the Government's €10 tourist tax.

Since the Government's €10 tourist tax was introduced on April Fools Day 2009, traffic, particularly price sensitive passengers have declined at Shannon. Ryanair, which had based 6 aircraft (an investment of over $400m) in Shannon last winter, reduced this to 4 aircraft in summer 2009 and is reducing the base further to three aircraft in Winter 2009/10 as the Government's €10 tourist tax continues to devastate traffic and visitor numbers at all Irish airports and Shannon in particular.

Ryanair has written to Shannon Airport confirming that it has lost money in each of the 5 years it has operated a base at Shannon Airport. Nevertheless Ryanair has confirmed that it is willing to continue to base aircraft and deliver substantial passenger numbers and jobs at Shannon if the €10 tourist tax is removed on or before 1st February 2010 and if Shannon Airport extends Ryanair's cost base on a competitive basis for a further 5 year period.  Ryanair is seeking a 50% reduction in its costs at Shannon, which would reflect the 70% decline in average fares which Ryanair has suffered at Shannon over the past 5 years.  

If the Government €10 travel tax is removed at Shannon, then Ryanair will commit to delivering more than 1.2m passengers annually, on up to 4 based aircraft and 200 Ryanair jobs being maintained at the airport. However, if the Shannon cost base is not extended, or if the Government's €10 tourist tax is not removed, then Ryanair will reduce its Shannon base by 75% to 1 based aircraft, which will largely operate the London and some UK provincial routes, guaranteeing just 50 jobs, and 300,000 passengers p.a.

Ryanair's Michael Cawley said:

"We call again on the Irish Government to scrap this stupid and damaging €10 tourist tax. Since its introduction, traffic at the Irish airports has fallen by more than 15%, at a time when Ryanair is growing by almost 1 million passengers each month. All of Ryanair's and Aer Lingus' traffic growth is now taking place outside of Ireland because of the impact of the DAA's high costs and the Government's tourist tax. 

"The Belgian and Dutch Government's have already realised the damage that these tourist taxes cause and have scrapped them. Similarly the Greek and Spanish Governments have reduced their airport charges, in some cases to zero, in order to reverse traffic and tourism declines during the current recession. The Irish Government and its inefficient airport monopoly the DAA must follow suit. It's time to lower airport charges and axe the tourist tax, before this Government turns away even more passengers, tourists and jobs at Shannon and the other Irish international airports".

Ends.                                        Wednesday, 21st October 2009

For further information

please contact:            

Stephen McNamara               Pauline McAlester

Ryanair Ltd                            Murray Consultants

Tel: [phone]            Tel. [phone]

 

END

 

 

NRAILFIFIILLFIA