Ryanair proposal ‘unrealistic’

TRANSPORT Minister Leo Varadkar has dismissed as “unrealistic” a proposal by Ryanair, which it claimed could result in the creation of 1,000 jobs, as the low-cost carrier has based its figures on having largely free use of Shannon Airport, something that “just isn’t on”.

Speaking to The Clare Champion, he also dismissed a claim by former Shannon Airport director and former director general of Aer Rianta International (ARI) Liam Skelly that Shannon should receive over €300 million in recognition of its contribution to the development of ARI, after it leaves the DAA group.
In relation to Ryanair, he said the proposal, which would see them treble their passenger numbers at Shannon and negotiate a free deal on projections of an increase of over 600,000 passengers, “just isn’t on”.
“You can’t teach an old dog new tricks, you know. Of course they had one [a deal] at Shannon before that they ended up breaching. The offer is based on the idea that they would have free use of the airport for 10 years and that’s just not realistic. You couldn’t run an airport for free and you can’t pay staff with nothing.”
While Ryanair has claimed the airport could make a worthwhile profit through car parking charges and goods being bought in airport shops, Mr Varadkar said this isn’t the case.
“It doesn’t really add up. There would be some revenue from car parks and retail but it wouldn’t be sufficient and that’s particularly the case with Ryanair passengers because they limit the amount of luggage that you can bring in terms of its weight and because they limit hand luggage as well, Ryanair passengers tend to buy very little when they visit the country.”
With regard to ARI and Mr Skelly’s call for over €300m for Shannon, Mr Varadkar said the supports the airport received over the years have not been factored into the equation.
“The mistake he’s making in his calculations is not to calculate the entirety of the other side of the balance sheet, which consists of the losses made by Shannon, which have been picked up by the DAA, and the capital investment that has occurred in the airport, which was funded by the other airports.
“On top of that, the value of the stopover. The stopover was a huge subsidy for the airport and you’ve got to add to that the fact that Cork was never given the opportunity to go transatlantic, for the benefit of Shannon.”
He did acknowledge that the contribution of Shannon to the development of Aer Rianta International couldn’t be ignored when separation occurs.
“I think the fact that ARI started in Shannon has to be recognised. It is still based there and that’s going to remain the case as far as I’m concerned.”
Shannon Airport’s debt is to be written off and it’s expected to get a sum in the region of €50m. It seems like a very small amount of money given the hundreds of millions that the DAA raised through the sale of ARI assets, such as its shareholding in Birmingham Airport and the sale of the Great Southern Hotel group.
However, Mr Varadkar wasn’t keen to go down the road of explaining in any detail where those hundreds of millions went and how much of a share Shannon received. “I think an over-concentration on history and a partial concentration on history isn’t what we need to bring the airport forward,” he said.
Some informed figures believe the only hope of restoring some of Shannon’s lost traffic is to strike another deal with Ryanair to bring more passengers in. Minister Varadkar said it’s more complex than that.
“I don’t think it’s inevitable. Ryanair is an airline that can deliver growth. It did deliver growth to Shannon before but it didn’t deliver much revenue, unfortunately. Really, any deal that the new airport management do with Ryanair, I think if they’re wise they’ll make sure it brings some revenue and not just passengers.”
He said there are no plans for new marketing supports for Shannon.
“Not at this immediate point in time but there is co-operative marketing ongoing on some of the routes. Certainly, what is on offer for any new route into Shannon is that if it’s long haul, there are no charges for five years and if it’s short haul, they pay reduced charges for the first five years and we will help to pay for some of the marketing.”