Ryanair - 6
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From Today's Examiner:
O’Leary: €10 airport tax will kill off Shannon
By Niamh Hennessy
RYANAIR plans to cut its passenger numbers through Shannon Airport from two million to a mere 750,000 due to the Government’s controversial airport tax.
The airline’s chief executive, Michael O’Leary, said the reduction — brought on by the €10 departure tax announced in the budget — would doom the mid-west airport.
He said while Ryanair was to account for 60% of Shannon’s traffic this year, next year it would cut the number of aircraft based there from four to one, with the loss of 100 Ryanair jobs.
“You will see tumbleweed rolling across the ground at Shannon,” said Mr O’Leary.
“This travel tax has been badly thought out and the Government will effectively be responsible for closing Shannon Airport.”
The airport said it was in communication with all carriers at Shannon on a continuing basis, including Ryanair, and would maintain that approach.
“We have a five-year agreement with Ryanair that we are extremely happy with,” said a spokeswoman.
“We are very confident their passenger targets will be met and look forward to continuing to work with the airline beyond the existing deal, which concludes in 2010.”
However, one airport source added that Ryanair has six aircraft operating out of Shannon, serving 35 destinations, that the airline had committed to raising passenger numbers to two million by 2010 and the airport was determined the agreement would be honoured.
Shannon Airport is already reeling from the loss of its Heathrow slots and the proposed withdrawal of 300 of its staff by Aer Lingus. The cut in services by its main remaining airline would be devastating.
Meanwhile, Mr O’Leary blasted the budget as a “wasted opportunity” and warned, if taxes continued to rise, he may have to consider shifting his tax base from Ireland.
The chief executive also predicted Ryanair would be making annual profits of €800 million in five years’ time and will be carrying 100 million passengers.
Ryanair is expecting to only break even in its current financial year, mainly due to earlier high oil prices.
However, if oil prices stay under $100 a barrel, profits will rise significantly in the coming years.
Earlier this year, Ryanair was caught off guard, paying high prices for oil after failing to hedge when the price was low.
“Looking back it was stupid not to hedge on oil but we’re not hedged for the remainder of the year and that’s a good move,” said Mr O’Leary.
O’Leary: €10 airport tax will kill off Shannon
By Niamh Hennessy
RYANAIR plans to cut its passenger numbers through Shannon Airport from two million to a mere 750,000 due to the Government’s controversial airport tax.
The airline’s chief executive, Michael O’Leary, said the reduction — brought on by the €10 departure tax announced in the budget — would doom the mid-west airport.
He said while Ryanair was to account for 60% of Shannon’s traffic this year, next year it would cut the number of aircraft based there from four to one, with the loss of 100 Ryanair jobs.
“You will see tumbleweed rolling across the ground at Shannon,” said Mr O’Leary.
“This travel tax has been badly thought out and the Government will effectively be responsible for closing Shannon Airport.”
The airport said it was in communication with all carriers at Shannon on a continuing basis, including Ryanair, and would maintain that approach.
“We have a five-year agreement with Ryanair that we are extremely happy with,” said a spokeswoman.
“We are very confident their passenger targets will be met and look forward to continuing to work with the airline beyond the existing deal, which concludes in 2010.”
However, one airport source added that Ryanair has six aircraft operating out of Shannon, serving 35 destinations, that the airline had committed to raising passenger numbers to two million by 2010 and the airport was determined the agreement would be honoured.
Shannon Airport is already reeling from the loss of its Heathrow slots and the proposed withdrawal of 300 of its staff by Aer Lingus. The cut in services by its main remaining airline would be devastating.
Meanwhile, Mr O’Leary blasted the budget as a “wasted opportunity” and warned, if taxes continued to rise, he may have to consider shifting his tax base from Ireland.
The chief executive also predicted Ryanair would be making annual profits of €800 million in five years’ time and will be carrying 100 million passengers.
Ryanair is expecting to only break even in its current financial year, mainly due to earlier high oil prices.
However, if oil prices stay under $100 a barrel, profits will rise significantly in the coming years.
Earlier this year, Ryanair was caught off guard, paying high prices for oil after failing to hedge when the price was low.
“Looking back it was stupid not to hedge on oil but we’re not hedged for the remainder of the year and that’s a good move,” said Mr O’Leary.
10 Euros cost increase
MOL has gone on record more than once to say that Shannon is either a loss making or break-even base. Apart from 3 destinations (Dublin, Paris CDG and Minsk) he has a complete monopoly on flights in and out of Shannon to Europe. Thus, it's not the individual consumer who determines air traffic, but a single private company.
Microeconomics theory says that a rational agent with a monopoly should try to raise prices and supply an inferior product to gain maximum profit. Any other airline without known large reserves that decided to fly to Shannon could credibly expect some form of below-cost-sales by Ryanair until they exit the route.
Is this just Ryanair now trying to exercise their monpoly control ?
Further, as Shannon historically has not been a great profit-maker, is this just the excuse MOL has been waiting for to deploy a couple of planes to a bigger urban centre elsewhere ?
Microeconomics theory says that a rational agent with a monopoly should try to raise prices and supply an inferior product to gain maximum profit. Any other airline without known large reserves that decided to fly to Shannon could credibly expect some form of below-cost-sales by Ryanair until they exit the route.
Is this just Ryanair now trying to exercise their monpoly control ?
Further, as Shannon historically has not been a great profit-maker, is this just the excuse MOL has been waiting for to deploy a couple of planes to a bigger urban centre elsewhere ?
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Fr Snn
Given the rapid expansion going on in Italy in anticipation of Alitalia's collapse/reduction, FR looking to redeploy planes while at the same time point scoring on the Irish market.
The continuing strike at Boeing is presumably delaying planned deliveries. Chopping a couple of airframes from Valencia will allow pre-existing plans to be fulfilled.
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On the 25.09.2008 FR announced a sixth aircraft fo SNN. Now they threaten to reduce to 1 aircraft due to the 10 € government charge. If SNN is so bad for FR (average fare for 5 months is 10 €), why do they continue to increase capacity?
Join Date: Nov 2006
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Possibly something to do with the commitment to the airport to generate x amount of pax.
I wouldn't be surprised if there is a financial reward to FR if this number is reached.
Remember the hulabaloo at NWI with BE reportedly employing actirs to travel on a route as it was cheaper to do this than lose the reward money
I wouldn't be surprised if there is a financial reward to FR if this number is reached.
Remember the hulabaloo at NWI with BE reportedly employing actirs to travel on a route as it was cheaper to do this than lose the reward money
Join Date: May 2008
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SNN is a low cost airport with a low cost carrier, Ryanair, it's biggest customer. Unfortunately for SNN it will have to play ball with MOL as it has no other options left.
The sad thing is though, that MOL is using SNN as a pawn in his argument with the DAA. He tried that with ORK too and it backfired on him, in terms of public support.
Hopefully the 3 airports will be separated and allowed to compete with each other soon, and all this FR V DAA business can stay in DUB where it belongs.
The sad thing is though, that MOL is using SNN as a pawn in his argument with the DAA. He tried that with ORK too and it backfired on him, in terms of public support.
Hopefully the 3 airports will be separated and allowed to compete with each other soon, and all this FR V DAA business can stay in DUB where it belongs.
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Join Date: Jan 2008
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MOL is funny. Years ago when Cornwall CC announced their passenger tax at Newquay he went fuming to the Western Morning News and the like predicting the same...tumbleweed and the likes and that the Cornish economy would crumble, because Ryanair would pull out etc etc...
They are still there, although I am unsure if CCC made a "deal".
He is full of puff, bull and bluster IMHO.
They are still there, although I am unsure if CCC made a "deal".
He is full of puff, bull and bluster IMHO.
Stockholm / Goteborg / Oslo
Anyone care to give an informed opinion as to the likelihood of MOL doing one or more of the following:
- Basing more a couple more planes at Skavsta. Many of FR's Skavsta routes competed against Sterling routes, but with almost complete dominance at Skavsta I imagine MOL won't want Norwegian getting too much clout at Arlanda.
- Moving the FR base from Skavsta to Arlanda, in the same style as the Forli-Bologna move. SAS would make their feelings known very clearly, but who am I to know ?
- Set up a small base at Goteborg
- Set up a base at Torp. Seem to remember the evening curfew being quite strict - but that was a while ago.
Aalborg and Billund don't seem to have the demographics for a base, but if the local Govt wants flights badly enough...
The only thing I can't see is MOL making no competitive response
- Basing more a couple more planes at Skavsta. Many of FR's Skavsta routes competed against Sterling routes, but with almost complete dominance at Skavsta I imagine MOL won't want Norwegian getting too much clout at Arlanda.
- Moving the FR base from Skavsta to Arlanda, in the same style as the Forli-Bologna move. SAS would make their feelings known very clearly, but who am I to know ?
- Set up a small base at Goteborg
- Set up a base at Torp. Seem to remember the evening curfew being quite strict - but that was a while ago.
Aalborg and Billund don't seem to have the demographics for a base, but if the local Govt wants flights badly enough...
The only thing I can't see is MOL making no competitive response
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Stockholm / Goteborg / Oslo
Sterling's collapse is a sigh of relief for competitors. I'm not sure to what extent we'll see airlines racing to take on their routes.
All that said, don't forget that Ryanair are (once again) in advanced negotiations with Copenhagen airport, and correct me if I'm wrong, but isn't there an airport near Uppsala getting ready to become an international airport? That could potentially take Ryanair's fancy.... Maybe, maybe not...
Join Date: Jun 2006
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Cancellation Policy
Can anyone advise why I am told by the call centre that Ryanair do not have a cancellation policy.
All I want to do is cancel a flight ...I dont want or expect a refund of the seat fare but would like to arrange a government tax refund but no I am told that I must call back after the flight date to arrange this...
What
nonsense , surely its better for the airline to know how many definate 'no-shows' there will be.
I managed to cancel my AerLingus flights by phone with a very polite Irish lady who also arranged a card refund for the taxes there and then....
And the Aer Lingus flights were cheaper in the first place..
Come Ruinair wake up and either offer decent customer service or bargain prices but as far as I can see its neither.
All I want to do is cancel a flight ...I dont want or expect a refund of the seat fare but would like to arrange a government tax refund but no I am told that I must call back after the flight date to arrange this...
What
nonsense , surely its better for the airline to know how many definate 'no-shows' there will be.I managed to cancel my AerLingus flights by phone with a very polite Irish lady who also arranged a card refund for the taxes there and then....
And the Aer Lingus flights were cheaper in the first
place..Come Ruinair wake up and either offer decent customer service or bargain prices but as far as I can see its neither.