This article is from page 2 of the 2008-05-06 edition of The Clare People. OCR mistakes are to be expected so download the original SWF or the rendered page 2 JPG
RYANAIR yesterday warned that its multi-million euro deal with the Shannon Airport Authority (SAA) may not be renewed if the airport does not further reduce its cost base.
The threat was issued by the low- cost airline as it confirmed that while passengers and routes are ahead of forecast at Shannon, they are based upon at much lower yields. Yields are the profits airlines make per passen- ger and the spokesman said that the lower yields are not a trend at Rya- nair’s other UK and European bases.
The maintenance of the five-year
deal — worth €300 million to the west of Ireland according to the Shannon Airport Authority (SAA) — is key to the airport’s survival and is up for re- newal in two years’ time.
The threat also comes as the airport authority negotiates its independence from the Dublin Airport Authority with the Department of Transport.
Asked if the low yields should be a cause of concern for interests in the west of Ireland anxious that Ryanair renew its deal with the SAA, the spokesman said, “No, but if the cost base at Shannon does not reduce fur- ther to reflect these lower yields, then the deal may not be renewed.”
Shannon Airport has become in- creasingly reliant on Ryanair since it established its base at Shannon in 2005, with the airline now flying to 32 destinations and accounting for over two million or two-thirds of passengers at Shannon.
Underlining Ryanair’s dominance at Shannon, the company has recent- ly erected a “Welcome to Ryanair Country’ billboard at the entrance to the airport.
SAA board member Tadgh Kear- ney said he would “caution against any scaremongering over a problem that hasn’t arisen yet.”
‘The facts are that we are halfway
through a five-year deal and in Year 3, we are going are to pass the targets for Year 5.”
Mr Kearney said that lower yields have arisen due to the global econ- omy being on the early stages of a downturn.
A spokesman for the SAA said, “Shannon Airport has enjoyed a very successful relationship with Ryanar, so much so that the targets for year 5S will be reached this year with two million passengers on Ryanair routes.
“We look forward to growing this business and to continue this rela- tionship when the current deal con- cludes in 2010.”