Shannon withdraws from Ryanair deal

 

The Shannon Airport Authority (SAA) confirmed tonight it will not be entering a new five year deal with Ryanair due to the airline’s unreasonable demands.

The existing five year deal is due to expire next April and Ryanair is demanding an end to the Government’s €10 tourist tax and a 50 per cent reduction in its costs at Shannon in order for the deal to the renewed.

Last year, Ryanair’s 1.85m passengers out of Shannon accounted for 60 per cent of the airport’s overall passenger numbers and the airline’s importance to Shannon has increased as transatlantic numbers have reduced.

The impact of a Ryanair pull-out could reduce passenger numbers at Shannon from a 2007 high of 3.6 million to around 1.25 million passengers per annum if a replacement carrier is not identified.

However, Director of the SAA, Martin Moroney said today that Shannon “cannot accede to Ryanair’s unreasonable demands and will therefore not be entering into another five-year agreement with the airline”.

Mr Moroney said that “the airport has been keen to arrive at a further agreement with Ryanair; however this had proved impossible as the airline’s current demands were unrealistic”

According to the SAA, in the new deal, Ryanair has offered to deliver only 600,000 annual passengers at Shannon, as against the previously agreed throughput of two million.

A spokesman for the SAA said: “Even with such drastically reduced throughput, Ryanair made a number of additional demands, some of which are actually outside the control of Shannon Airport.”

Mr Moroney said it was impossible to come to a mutually beneficial agreement with the airline, because its unreasonable demands were non-negotiable.

He added: “It is regrettable that Ryanair, on the basis of not having its demands met, has indicated that it will further reduce its services from Shannon on the completion of the current five-year agreement.”

Mr Moroney added that while the current economic climate remains difficult, Shannon Airport would continue to work with all airlines to deliver commercially viable routes to the region.

“We are open to any proposal from any airline, including Ryanair, but it has to make commercial sense,” Mr Moroney said.

A Ryanair spokesman rejected Shannon Airport’s “false claims” that Ryanair’s terms for a 5 year extension of its Shannon cost base were “unrealistic”.

He said: “Ryanair had offered Shannon better cost terms than are presently being offered to Ryanair by many other lower cost airports in better destinations all over Europe.”

He added: “The combination of the Govt’s tourist tax and the DAA’s airport charges now makes Shannon uncompetitive. Since Shannon has rejected Ryanair’s offer the airline will proceed to cut its based aircraft in Shannon next summer by 75% (from four to one) aircraft with the loss of 150 Ryanair jobs and a loss of 1.5m Ryanair passengers in Shannon and the Mid-West region.