Ryanair move will boost Kerry Airport annual revenues by at least 15%

Annual revenues at Kerry Airport will be boosted by at least 15 per cent this year due to Ryanair's decision to move the bulk of its service between Shannon and Hahn in Germany to the facility.

The jump in revenues will be attributable primarily to a €6 "airport development fee" which Kerry charges each passenger departing from the airport. Ryanair will include the fee in customer fares.

Until last summer, the airline had been in a legal dispute with Kerry Airport over the development fee, which it had refused to charge to passengers travelling between Kerry and Stansted. The legal action ended in Kerry's favour.

Currently, Ryanair levies an "airport tax" of €4.35 per departing passenger at Shannon. If Ryanair had chosen to continue operating the Hahn service from Shannon after a current arrangement involving no charges expires in May, this would have initially risen to €4.80.

Kerry Airport chairman, Mr Denis Cregan, said yesterday that he expected passenger traffic on the Hahn route to generate about €480,000 annually when it begins to operate in two months' time.

This figure is based on 80,000 passengers passing through the airport. In 2002, Ryanair carried 100,000 passengers on its service between Shannon and Hahn, 84 per cent of whom were German.

Total revenues at Kerry Airport are thought to have amounted to less than €3.5 million last year. The company, which is owned by about 6,000 local shareholders, recorded a retained profit of about €200,000.

Kerry is also believed to have negotiated a handling fee from Ryanair for the Hahn service although details on this were unavailable yesterday.

In return, Kerry Airport will be setting aside a "marketing development fund" to cover promotional activity for the route. In the first year, this will amount to between €100,000 and €150,000, with a further €50,000 to be spent in the following two years.

A spokeswoman for Ryanair said that Kerry had presented "a far better deal" than Shannon.

In a letter sent to Aer Rianta Shannon on Wednesday, Ryanair chief executive, Mr Michael O'Leary, described Shannon's stance on the Hahn service as "the latest in a long line of examples of the damage done to Irish tourism and Irish air transport by the high-cost, inefficient Aer Rianta monopoly".

In response, Shannon's director, Mr Martin Moroney, said the continuation of Ryanair's current free deal with the airport would have discriminated against other airlines and severely undermined the finances of the airport.

It has meanwhile emerged that Ryanair had been in negotiations with Kerry Airport about beginning a service to Hahn for much of the last year.

Mr Cregan said Kerry would have been "reasonably happy" with a summer service, but was delighted to have attracted the daily traffic.