Shannon Airport cannot agree to Ryanair’s unreasonable demands

No commercial airport in Europe could agree to the non-negotiable terms set out by Ryanair in relation to Shannon. As a commercial company, Shannon Airport is committed to incentivising growth, but any agreement has to be financially viable for both the airport and the airline. Ryanair's terms would be financially ruinous for any airport.

Ryanair's claim that it is merely seeking an extension of an existing incentive scheme available in Dublin is utterly untrue. Its claim that other airlines are availing of a similar incentive scheme is also untrue. What Ryanair has demanded bears no relation whatsoever to any existing scheme at any DAA owned airport.

Rather than paying the normal passenger charges at Shannon, Ryanair wants instead to be paid €4.70 by Shannon Airport for every passenger it brings to the airport. In addition to seeking payment for passengers, Ryanair says it will pay no landing or aircraft charges at Shannon for what it defines as any new passengers. The airline is also demanding a range of other free services such as free check-in desks, free offices, and free communications.

Ryanair has also insisted that DAA pay back €3.7 million that Ryanair paid DAA in January. This payment was made to settle a High Court case that related to Ryanair's failure to meet passenger targets at Shannon Airport under a previous deal. Ryanair has insisted that this €3.7 million payment, which could be construed as a form of "hello money," be made by DAA to the airline before a single new passenger, as Ryanair defines them, is delivered at Shannon.

Having been forced to take legal proceedings over an airline's failure to meet a previous binding agreement in relation to passenger targets, no airport could be expected to hand back a €3.7 legal million settlement to that same customer in advance of any future deal.

Having obtained clarification from Ryanair in recent days, the DAA's initial view that the airline's position in relation to Shannon appeared unsustainable has been borne out. On that basis, Shannon Airport cannot accede to Ryanair's request for financial support.

Ryanair claims the airline's current operation at Shannon handles 300,000 passengers per year, and it wants the airport to waive all charges and instead pay the airline for every passenger above that level. However the 300,000 figure quoted by Ryanair is more than 100,000 passengers below the airline's current indicated traffic level at Shannon for this year.

Shannon Airport's key focus is on developing sustainable passenger traffic and it has a range of incentive schemes that offer discounts of up to 100% on airport charges for new routes. Despite the significant reduction in traffic last year due to Ryanair's capacity withdrawals, Shannon Airport's financial position has improved during the past 12 months, as its airline customers - including Ryanair - are paying a sustainable charge for the services that they use.

Shannon's focus on sustainable passenger traffic has yielded a number of new routes and expansions in recent months. These include the establishment of new Aer Lingus Regional services to Manchester, Birmingham, Glasgow, Edinburg and Bristol and new Aer Lingus services to Gatwick and Paris-Charles de Gaulle.

Ryanair, despite the ending of its previous agreement, has also expanded its presence at Shannon recently with a new Fuerteventura service from February, as well as the reinstatement of its Nantes, Malaga and Palma-Mallorca services.

The traffic decline at Shannon Airport over the past 12 months is almost entirely due to the withdrawal of Ryanair services, following the end of Ryanair's previous deal with Shannon, the terms of which Ryanair failed to honour. About 90% of the decline in passenger numbers is due to the significant reduction in Ryanair services.

Ryanair also failed to deliver the tourist numbers that it promised for the region under the previous Shannon agreement. When Ryanair launched the previous agreement, it claimed that 80% of traffic into Shannon would be inbound tourists. However, it transpired that on many of the European routes that it operated, 80% of the traffic was outgoing Irish people travelling abroad and only 20% were inbound tourists.