Shannon antics

Disscusion on plane spotting, visitors, airlines, routes, airports, equipment etc.

Moderator: mark

Post Reply
User avatar
Dutch Roll
Unverified User
Unverified User
Posts: 871
Joined: Thu May 13, 2004 8:36 pm
Location: shannon
Contact:

Shannon antics

Post by Dutch Roll » Mon Oct 17, 2005 1:00 pm

anyone see the indo over the weekend???
here,

IRELAND faces an embarrassing battle with Brussels over the discount deals given to Ryanair so it would develop a hub at Shannon Airport.

The European Commission has complained to the Government that it was never notified of special fees the State-owned airport offered the budget airline.

The intervention from the EU is just the latest major problem to confront Transport Minister Martin Cullen. His office is responsible for informing the Commission of any aviation developments.

Last night, the Commission revealed that it is also conducting a widespread investigation across Europe into Ryanair's airport contracts.

If these are found to be in breach of EU law, then it could have severe repercussions for the airline's low-cost strategy.


When contacted, Mr Cullen's officials acknowledged they had received the correspondence.

"We can confirm we received the letter. We now have roughly two months to respond," said a spokesman for the Transport Minister.

Taxpayers could also have to foot the bill if the deal is found to be illegal. The EU could fine the Government millions if it feels Shannon's terms amount to an illegal subsidy for Ryanair.

The airline also faces being forced to hand back money too. It could either withdraw from the nine new routes it established or end up paying higher fees.

In a letter received by the Government in the past few days, the director general of the Transport directorate, Francois Lamoureux, has demanded answers on the deal.

He warns that the reduced passenger and landing fees for Ryanair should have been first cleared in Brussels. The airline also received ?500,000 in marketing assistance from Shannon Airport to base four new Boeing 737 planes there.

The case closely resembles another row with the European Commission, which Ryanair lost, over the special deal it received to develop operations at Charleroi Airport in Belgium.

It led to the airline's chief executive, Michael O'Leary branding the Commission "the evil empire".

The long-running row continues in the European Courts, but Ryanair was ordered to pay back around ?4m and rewrite its contract at Charleroi.

Last night the European Commission refused to comment on the Shannon case directly. But instead revealed that there is a widespread review of the special rates Ryanair has negotiated around Europe.

"We're investigating complaints against Ryanair and other low-fare airlines at a number of airports," said the Commission's Transport spokesman. "But just because we're looking into them, doesn't mean the airline's are doing something wrong."

Usually, complaints about Ryanair stem from other airlines being squeezed by the tough competition. Just days ago, another investigation was launched at Tampere airport in Finland. Authorities there insist it is completely legal since Ryanair uses an older terminal than the other airlines at Tampere.

It is unclear how, following the tremendous publicity the Charleroi row attracted, the Government did not think to clear the deal with the Commission. EU rules stipulate that taxpayers' money must not be used to subsidise airlines in a manner that enables them to establish an unfair advantage over competitors.

According to recently published guidelines, the Commission does allow some discount incentives, so the Shannon deal may be legal.

Shortly after Aer Rianta was split into three semi-autonomous airport authorities last year, Ryanair negotiated the special terms at Shannon in November.

It announced it would base new planes there, expand to 14 routes connecting with Britain and continental Europe, and create 200 new jobs delivering two million passengers per year to the West.

Since May this year it opened routes to Luton, Gatwick, Nottingham, Barcelona, Dusseldorf, Hamburg, Milan, Malaga and Stockholm. For the first year, it only has to pay a fee of ?1.50 per departing passenger and nothing on arrivals. The airline gets charged around ?2.50 per passenger on existing routes.

Strategically, European expansion by Ryanair was intended to cushion the shake-up at the airport, should it lose the compulsory Shannon stopover on US-bound flights.

Minister Cullen has become one of the EU's most enthusiastic supporters in favour of quickly concluding a deal with the US that would liberalise the entire trans-Atlantic aviation sector.

He argues that the benefits of better tourism links to the US and more routes for Aer Lingus that would stem from an 'open-skies' deal, outweigh the eventual loss to Shannon Airport of the current compulsory stopovers.

what a joke,makes good reading,is this a sign of panic!!
115 VAC @400Hz

Rallye EIBFP
Unverified User
Unverified User
Posts: 615
Joined: Mon Jul 05, 2004 9:56 pm

Post by Rallye EIBFP » Mon Oct 17, 2005 7:09 pm

Its not panic.

It is customary for airlines to negotiate deals at airports? Ryanair is not the first to recieve monetary payments to get them going.

User avatar
Dutch Roll
Unverified User
Unverified User
Posts: 871
Joined: Thu May 13, 2004 8:36 pm
Location: shannon
Contact:

Post by Dutch Roll » Mon Oct 17, 2005 8:29 pm

this seems a bit extreme compare to others,i know ryanair do try negociate before they set up as part of low cost ops,but shannon gifting ryanair advertising is a bit extreme,sounds like desperation to me.
115 VAC @400Hz

Akerosid
Unverified User
Unverified User
Posts: 124
Joined: Mon Mar 08, 2004 5:55 pm
Location: Jersey, CI

Post by Akerosid » Mon Oct 17, 2005 9:45 pm

I think the EU really needs to look at this whole area. There is a kind of Catch 22 situation; regional airports are not generally attractive as business propositions and need state aid; could anyone really see SNN being an attractive business proposition, even given the advantage of the stopover? The other side of this in order to give good deal to airlines, the EU insists that they are privately owned. Effectively, airports in peripheral regions are at a disadvantage. The privately owned airports - generally in or near large cities and more than likely well established are favoured.

So, where do we go from here? What if the EU says "no, you must give all the monies back?" An airline that wanted to fly there and an airport that wanted to attract them are divided; who wins? No one, really; the EU has decided that economics takes precedence over the social importance of aviation. Ryanair can make these peripheral centres more economically successful; that doesn't come for nothing. Realistically, there is a cost and a risk to the airlines concerned. Now, the EU can go through each of deals one by one and cut these cities off - Tampere, Shannon and no doubt, others as well. How will that aid regional development - development aid which will come from the EU's budget.

Politically, it will be very risky as well; the EU wants this treaty to go through (once it's recusitated - which will take some time); the EU's name in many regions will be mud. It needs to think about the reality here.

conor_mc
Unverified User
Unverified User
Posts: 43
Joined: Sun Nov 14, 2004 3:41 pm
Location: Dublin

Post by conor_mc » Tue Oct 18, 2005 1:15 pm

The intervention from the EU is just the latest major problem to confront Transport Minister Martin Cullen. His office is responsible for informing the Commission of any aviation developments.


You see, there's the problem. The Dept has successfully held up anything that even resembles an "aviation development" for so long that they didn't know what to do when one came along...!!!!

I'm not a cynic, I swear :shock:

Rallye EIBFP
Unverified User
Unverified User
Posts: 615
Joined: Mon Jul 05, 2004 9:56 pm

Post by Rallye EIBFP » Fri Oct 21, 2005 6:54 pm

Good lord it is desperation yes.

Thomson Fly, HLX and Centralwings also got such monies.

Post Reply

Who is online

Users browsing this forum: No registered users and 4 guests