SHANNON

[MarkD]

Shannon are reporting 2.5m pax for the first 9 months of 2005 and estimating over 3m of the full year.

Needless to say UK and Europe provided all the increase (68pc and 41pc) and transatlantic a paltry 2pc.

http://www.rte.ie/news/2005/1005/shannon.html?rss

(edit: that's weird, I typed SHANNON but it came out Shannon. Let's try again...)

[LTNman]

http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1488993&issue_id=13145

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.

[MarkD]

I noticed on RTE News they ran footage of what seemed to be an Olympic A340 at SNN. Does anyone know why it was there, maybe an IFSD over the Atlantic or something?

[asianfly]

Excerpt from today's Irish Times regarding job cuts at SNN. They will do anything to hold onto their stopover, which is fine, once it does not come at the expense of the rest of the country. Get used to competition and a level playing field...it has had it far too easy for far too long!

"Siptu has called for the agreement with the US to end the Shannon stop-over to be put on hold pending the carrying out of an economic impact study.

Michael Halpenny, Siptu's National Industrial Secretary, said: "With a deal between the EU and the US not now expected until next Spring at the earliest, there is now space for the Government to carry out the impact study."

Claiming that 10,000 jobs are connected to the 'Shannon project', Mr Halpenny said that it is incomprehensible that Government could have approached the ending of the stop-over in such a cavalier manner given the importance of Shannon to the economy of the west of Ireland.

Mr Halpenny described the deal struck by the Minister for Transport, Martin Cullen last Friday as a "bad deal" for Shannon."

[akerosid]

I couldn't find that article, Asianfly; I don't suppose you could paste it (looked in today's IT).

Anyway, it doesn't surprise me; they still don't get the fundamental issue that they want to hold back Dublin in order to help SNN. Why can't they see this doesn't work? It's just irresponsible.

Do they really want an objective, independent analysis; will they accept its findings? What if its findings are that this kind of protectionism doesn't work. Any inquiry (and I'd welcome one, as long as it didn't hold things back) needs to focus on what Shannon needs and why its success shouldn't depend on holding another airport back. As you say, the time is coming for it to stand on its own two feet.

It's still very regrettable that growth in 2006 has been almost completely ruled out.

My big worry, of course, is that with the national pay talks coming up, SIPTU will try to make issues such as this and the privatisation of Aer Lingus pre-conditions (i.e. do it their way) for entry into talks.

[asianfly]

Here you go Askeroid. The Irish Times is a subscription site, so not sure if you can access the link. Cheers!
http://www.ireland.com/newspaper/finance/2005/1116/756538701BZDEEGAN.html

[Global Pilot]

"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."

Only three aircraft based there at present to my knowledge. Two were added to the one that has been based there for a number of years.