Aer Arann confirms new tender for five regional routes

Aer Arann is the only airline to have submitted a tender to operate five regional routes in Ireland from next month.

Other airlines asked to tender for the routes said yesterday they had declined due to the demanding criteria set by the Department of Public Enterprise. The six airlines asked to tender - Aer Lingus, Ryanair, CityJet, Irish Air Transport, Loganair and Aer Arann - were given just seven days to submit tenders, while the successful applicant must be in a position to commence the required services on November 5th.

"The job of putting a whole airline together for November 5th is way beyond what we could to," said Mr Michael Goss, fleet captain at Irish Air Transport. "That's only two weeks to set up an operation. It's physically not possible."

Airlines also could not submit a quote in respect of one, or some, of the five routes, a reason cited by Loganair's director of commercial operations, Mr Andy Jolly, for declining to tender. "There is inadequate time and all five services are tied together," he said.

A Public Enterprise spokesman conceded the criteria were demanding, but said the department's main concern was to ensure continuity of service. He added that three of the airlines asked to tender had operated regional routes in the past, or currently operated such routes.

The new tendering process is an interim measure - the contract is only for six months. The new process was initiated when Aer Arann told the Department that it could not guarantee the continued operation of services on the five public service obligation routes after November 4th.

Aer Arann receives £8.75 million (€11.11 million) a year in Exchequer funding to operate the routes. But it said that it could not guarantee the services because of rising costs and the changing aviation landscape.

"The business model we're working on now is totally different to the model we had put together a year and a half ago. Basically, costs have gone significantly up, passenger numbers are down a little bit and we can't continue long term to operate the model under the parameters we used in our submission a year and a half ago," said Mr Padraig CΘidigh, chief executive of Aer Arann.

"I relinquished the contract and there is a possibility that we will get the renewal of it but other airlines have an opportunity to make a submission and if they are cheaper than we are, so be it. I lose the gig. I suffer the consequences." The public enterprise spokesman said the department had received five responses by the noon deadline of yesterday, but declined to comment on the nature of those responses. However, as well as Irish Air Transport and Loganair, both Aer Lingus and Ryanair said they had not submitted tenders. CityJet said the routes on offer were not ones that would suit its fleet.

A decision on the tender is expected within days. As this new tender is for an interim period of six months, the State will invite tenders for the regional routes for a three-year period next summer. Irish Air Transport has indicated that it will apply for the three-year tender when it comes up next June.