Ryanair ultimatum on travel tax and charges

RYANAIR’S Deputy Chief Executive Michael Cawley has reiterated the airline’s claim that it is ready to axe the vast majority of its Shannon services unless the airport management cut charges in half and the Government abolishes the €10 air travel tax.
In an interview with The Clare Champion Mr Cawley said that if the airline does pull its services, thousands of jobs will be lost in the Mid-West. He also said that there is no room for negotiation, as Ryanair has numerous other options with airports that will offer better terms than Shannon.
Mr Cawley said that if Ryanair doesn’t get its way, passenger numbers would be trimmed from approximately 1.9 million back to around 300,000.
“Around 1,600 jobs would be lost around the airport. That’s not just my figure, the Airport Council International estimate that every thousand passengers create one job,” he commented.
He said that tourism and other industries around the region would feel the knock-on effects, resulting in further significant job losses. While Ryanair has around 150 staff at Shannon, he said those who wouldn’t be kept at Shannon would be given an option to redeploy. “They would all be offered work somewhere else. The airline is expanding and we’re taking another 40 or 50 aircraft this year.”
According to a recent Shannon Airport statement, Ryanair already “receives the most competitive price that Shannon can offer”. However, Mr Cawley has insisted that the airline will make major cuts if that position is persisted with.
He said that if a deal can be reached with Shannon and the air travel tax is dropped, Ryanair would commit to carrying in the region of 1.2 million passengers per annum from Shannon. While this would still represent a major drop on 1.9 million per annum, he said the number would be cut further to around 300,000 unless the airport and the Government do as it asks.
There will have to be a solution put in place by the end of November or early December, he added.
“The contract we have with Shannon doesn’t end until May but we need to tie this down in the next four or five weeks. There are too many other opportunities out there.”
While Ryanair is set to fail to meet the terms of its deal with Shannon this year, Mr Cawley said the airline couldn’t be held responsible. He ruled out any negotiations with Shannon. “There’s no room for flexibility. Our fares have dropped and the last time we did a deal with them they subsequently said they’d be reducing their own costs. We’ve lost money on each of the last five years but we’re still prepared to offer 1.2 million passengers.”
He was most scathing about the €10 air travel tax, which he describes as “idiotic” and which he claimed is costing the State money. “The financial impact it is having is that it has yielded €80 million or €90m and it’s after losing between €300m and €400m, which would have been generated by visitors.”
Mr Cawley was adamant that those who claim the €10 tax isn’t having a major impact are wrong. “I’ve sold around 500 million seats and I know that if you put on another 50 cent onto the price there will be a dramatic fall.”
He said that the UK is one of Ireland’s biggest markets and the Government was alienating people there. “People in Britain are worried about their jobs. If they’re sitting in London and looking at 104 Ryanair destinations, they’re not going to want to pay an extra €10 to come over to the rain and buy expensive drink. We’re having to subsidise it at the moment and why should we?”
He said that Ryanair recently began services to 45 holiday destinations in Spain, after the Spanish Government amended regulations to make the country more competitive.
In the Dáil, both Deputy Joe Carey and Deputy Pat Breen have criticised the tax, with Deputy Breen claiming there is a grave threat to Shannon. “It is reported that Ryanair is threatening to pull 75% of its services out of Shannon Airport as it negotiates a new deal with the authority. Ryanair serves 27 destinations, so just imagine if Ryanair were to axe 75% of its services, what would that mean for Shannon as regards jobs and indeed tourism for the entire region? The Government might as well turn off the lights if this happens.”