Airport has ‘priced itself out of the existence’

SHANNON Airport has “priced itself out of existence” according to Michael O’Leary.

At their July meeting, Clare County Council passed a motion requesting “Ryanair to deliver on their commitment to increase passenger traffic at Shannon Airport following the abolition of the €10 air travel tax”.
Senior executive officer with the council, Michael McNamara subsequently wrote to the airline on the matter, prompting a stinging rebuke from Michael O’Leary.
In a letter to Mr McNamara last Friday, the Ryanair boss criticised both the council and the Dublin Airport Authority (DAA), which runs Shannon.
“Since the air travel tax has not been ‘abolished’ and since Ryanair has never made the commitment claimed, your resolution is factually inaccurate and absurd. If the council had bothered to contact Ryanair prior to this inaccurate motion being passed, your discussions might have been guided by some facts or some elementary understanding of what Ryanair could do to reverse the appalling collapse under its current mismanagement by the DAA monopoly,” he wrote.
It wasn’t the only swipe at the council. “Perhaps Clare County Council should, at its next meeting, allocate some time to understanding why traffic at Shannon Airport has and continues to collapse and how growth could be restored instead of passing useless and erroneous resolutions requesting Ryanair to deliver upon an invented commitment that was never made, on the basis of the abolition of an air travel tax, which has not been abolished.”
The air travel tax now stands at €3 and when the Government’s jobs initiative was announced in May, its complete abolition was included as a measure. However, in the Dáil last week, Minister Leo Varadkar said he is still waiting on assessments and on responses from airlines before deciding whether or not to suspend the tax.
Mr O’Leary was very critical of the DAA in his letter to the council, blaming the body for introducing overly high charges at Shannon, which eroded the airport’s competitiveness.
“Not content with destroying the traffic and competitiveness, the DAA’s response to Shannon’s traffic collapse was to further increase airport fees by 33% in November 2010.
“Shannon was the only airport in Europe to increase its charges by 33%, more than 10 times the rate of inflation – last winter, at a time when most other airports in Europe were reducing prices.
“As a direct result of these unjustified DAA cost increases at Shannon, traffic has continued to implode and will, we believe, fall below 1.5 million in 2011. What resolutions has your council passed when the DAA engaged in this naked price gouging in Shannon last November?”
He also claimed Shannon would perform better if links with the DAA were severed.
“Ryanair has consistently stated that it can and will deliver rapid traffic growth at the main Irish airports but only when cost competitiveness is restored at these airports.
“This requires the abolition of the air travel tax and a return to competitive pricing at each of the three DAA airports. In our view, this will only be achieved at Shannon when it is freed from the dead hand of the Dublin Airport monopoly and new (local?) owners emerge with a commitment to competitive costs and traffic growth, whereas the DAA are focused solely on managing Dublin Airport and paying for their €1.2 billion white elephant T2 at the expense of Cork and Shannon airports,” the Minister said.