DAA Says Ryanair Shannon Deal Not Workable

chucken1

DAA Says Ryanair Shannon Deal Not Workable



28 February, 2011 - 14:30

• Transport

Ryanair is insisting that an offer to bring 1 million passengers a year to Shannon Airport is fair, despite the DAA saying it is economically unviable.
The airline is offering to operate up to 14 extra services from the MidWest Airport, in a deal which would see it receiving over four euro for each passenger who uses Shannon.
However, the DAA say the plan is 'unsustainable', as it will see Ryanair pay no landing or aircraft charges
It is also seeking the return of 3.7 million euro paid to the Authority less than six weeks ago.










http://www.clare.fm/news/daa-says-ryanair-shannon-deal-not-workable

It seems to me that the DAA are determined to stop any progress in Shannon!

Keano

I f**king detest the DAA and everything about them. The sooner Shannon get's to stand on it's own 2 feet then we might see the airport come out of Dublin's shadow.

Hawk Wing 2

chucken1 wrote: »

DAA Says Ryanair Shannon Deal Not Workable



28 February, 2011 - 14:30

• Transport

Ryanair is insisting that an offer to bring 1 million passengers a year to Shannon Airport is fair, despite the DAA saying it is economically unviable.
The airline is offering to operate up to 14 extra services from the MidWest Airport, in a deal which would see it receiving over four euro for each passenger who uses Shannon.
However, the DAA say the plan is 'unsustainable', as it will see Ryanair pay no landing or aircraft charges
It is also seeking the return of 3.7 million euro paid to the Authority less than six weeks ago.










http://www.clare.fm/news/daa-says-ryanair-shannon-deal-not-workable

It seems to me that the DAA are determined to stop any progress in Shannon!

surprise surprise

testicle

To be fair to the DAA, Ryanair are looking to be paid 4 euro per passenger and pay no landing or other charges to deliver these flights.

Whats happening

Keano A Legend wrote: »

I f**king detest the DAA and everything about them. The sooner Shannon get's to stand on it's own 2 feet then we might see the airport come out of Dublin's shadow.

Have you read the Ryanair proposal?? They want €4.70 for every passanger they bring through above 300K per year, given they currently project 400K this year alone the DAA/SAA would have to pay them for 100K passsangers they had already planned for, on top of that free office space, free landing charges, free staff room they want..

Oh yeah, and pay them back the €3.6M that the courts awarded to DAA/SAA for a contract that Ryanair broke as they failed to bring the passangers as contracted..

Keano

Whats happening wrote: »

Have you read the Ryanair proposal?? They want €4.70 for every passanger they bring through above 300K per year, given they currently project 400K this year alone the DAA/SAA would have to pay them for 100K passsangers they had already planned for, on top of that free office space, free landing charges, free staff room they want..

Oh yeah, and pay them back the €3.6M that the courts awarded to DAA/SAA for a contract that Ryanair broke as they failed to bring the passangers as contracted..

Yes the terms are excessive but that's Ryanair. Although, no way should they be given back the €3.6m

But what's the alternative? Let the airport continue on it's slippery slope.

phill106

DAA in pro-dublin airport, anti-shannon airport shock!

Seriously, its like tesco running dunnes, shannon airport must be run by shannon airport. If the people aren't there who are capable of it (i dont know), then they need to be brought in and get us out from this dublin biased madness!

highlydebased

It would be ideal if Shannon could fend for itself and make its own decisions. However its current financial state of play is far from ideal, and is the only reason we still need the airport under DAA control.

shannon_tek

I just get sick reading all this. The DAA make me so mad and Ryanair the whole lot of them need to be shot. Its a pity Shannon has to Rely on Dublin at present. I stand behind Shannon Anyday to make it an Independent Airport. Just everyone argues over it. If its not Dublin its Ryanair if its not those 2 its the Americans that are landing. Which i dont see is a problem havent read the full story as to why people hate it . but for a person who doesnt have background info. i Think there grand. There not attacking us there i take it bussiness some how . . . or is any money that does come to shannon go straight to dublin to pay for their failure of a terminal. I dont know. But We need to Fight to make it SAA

Run_to_da_hills

phill106 wrote: »

Seriously, its like tesco running Dunnes, !

Or the Queens running May Carneys, LOL.

On a serious note, Shannon is now almost a dead airport and beggars cannot be choosers.

What ever carrier can guarantee even double the traffic at this time, the Airport Authorities should just jump at it. They shouldn't be thinking of their own arse pocket but also should consider any spin off's associated with any increase of tourism in the area.

This will benefit the compound of the airport itself, its restaurants, shops, car parking, handling charges, hotels in the vicinity, transportation, etc.

Ryanair may be cheap and cheerful and O'Leary can be a bit of an asshole at times but at least they do guarantee to bring in the numbers.

chucken1

shannon_tek wrote: »

I just get sick reading all this. The DAA make me so mad and Ryanair the whole lot of them need to be shot. Its a pity Shannon has to Rely on Dublin at present. I stand behind Shannon Anyday to make it an Independent Airport. Just everyone argues over it. If its not Dublin its Ryanair if its not those 2 its the Americans that are landing. Which i dont see is a problem havent read the full story as to why people hate it . but for a person who doesnt have background info. i Think there grand. There not attacking us there i take it bussiness some how . . . or is any money that does come to shannon go straight to dublin to pay for their failure of a terminal. I dont know. But We need to Fight to make it SAA

Why? Easyjet came into Shannon,I think it was 2005,and f*c*ed off when Ryanair cut the prices to Gatwick..Ryanair flew the people of the West to more than the Uk! And now what have we? At least.can we stick together on the fact that we need Shannon? Lets not nit pick at the ones that are trying to do something!

chucken1

Neon-Circles wrote: »

It would be ideal if Shannon could fend for itself and make its own decisions. However its current financial state of play is far from ideal, and is the only reason we still need the airport under DAA control.

Its current financial state is because of the DAA. The only control they show to Shannon is to let the place die. Some control lads..T2 T2 T2 :rolleyes:

golfball37

Just to play Devils advocate here but why should the DAA accede to Ryanairs wishes?

True there will be extra traffic but it will be at the expense of what little paid for traffic the airport has at the moment as the first thing Ryanair will do is put in cheap similar routes to drive the current carriers away from Shannon.

Shannon is doing the right thing imo, build up a nice steady profile of routes staying away from Ryanair.

There's no long term sustainable future for the Ryanair model, we're only 1 tragedy or 1 middle eastern revolution away from the whole aviation industry being turned on its head, not to mention a current global economic downturn. Shannon should not take any Ryanair routes that go within 100 miles of existing destinations as we have seen how Ryanair do loyalty. Whats to say they won't pull out of Shannon again and then what are we left with?

phill106

golfball37 wrote: »

Just to play Devils advocate here but why should the DAA accede to Ryanairs wishes?

True there will be extra traffic but it will be at the expense of what little paid for traffic the airport has at the moment as the first thing Ryanair will do is put in cheap similar routes to drive the current carriers away from Shannon.

Shannon is doing the right thing imo, build up a nice steady profile of routes staying away from Ryanair.

There's no long term sustainable future for the Ryanair model, we're only 1 tragedy or 1 middle eastern revolution away from the whole aviation industry being turned on its head, not to mention a current global economic downturn. Shannon should not take any Ryanair routes that go within 100 miles of existing destinations as we have seen how Ryanair do loyalty. Whats to say they won't pull out of Shannon again and then what are we left with?

Its not just ryan air, our own national airline is perfectly happy to pull out of shannon as they have proved previously. While we shouldn't be totally dependent on ryan air, what is the harm in having them use the airport?

ClareVisitor

phill106 wrote: »

Its not just ryan air, our own national airline is perfectly happy to pull out of shannon as they have proved previously. While we shouldn't be totally dependent on ryan air, what is the harm in having them use the airport?

There's nothing wrong with having them use the airport, but they want it for free. The airport has to be maintained and invested in if it is to survive, paying carriers to use it is obviously unsustainable. Building up the traffic route by route might take longer and cause some more short-term pain, but will be a better bet in the long run.

Run_to_da_hills

ClareVisitor wrote: »

There's nothing wrong with having them use the airport, but they want it for free. The airport has to be maintained and invested in if it is to survive, paying carriers to use it is obviously unsustainable. Building up the traffic route by route might take longer and cause some more short-term pain, but will be a better bet in the long run.

So what if they get in for "free" If they were to pay O'Leary e1 for every passenger that he brings in they would make it back in other charges. The country would certainly make it up in tourism.

Look the Lynch Group, they are BUST now, what will be next ?

phill106

ClareVisitor wrote: »

There's nothing wrong with having them use the airport, but they want it for free. The airport has to be maintained and invested in if it is to survive, paying carriers to use it is obviously unsustainable. Building up the traffic route by route might take longer and cause some more short-term pain, but will be a better bet in the long run.

Im sure the planes would need refuelling, im sure that some of the passengers would avail of some food or services in the airport and im sure that every passenger that lands in shannon (barring transit flight) would spend something in the local economy.

BnB

Run_to_da_hills wrote: »

So what if they get in for "free" If they were to pay O'Leary e1 for every passenger that he brings in they would make it back in other charges. The country would certainly make it up in tourism.

Look the Lynch Group, they are BUST now, what will be next ?

Exactly. We shouldn't be looking at trying to get Shannon Airport to stand up on its own as a profit making airport.

We should be looking at it as a tool that we can use to bring visitors to the West of Ireland. It does not matter if we have to pump a 3 or 4 million into it every year. You have to look at the bigger picture.

Even if it costs us 1 million to bring in an extra 10k tourists then thats a great return. The Airport might lose money, but we'll get it back 2 or 3 fold in the hotels, food, drink etc etc etc.

5h4mr0(k

BnB wrote: »

Exactly. We shouldn't be looking at trying to get Shannon Airport to stand up on its own as a profit making airport.

We should be looking at it as a tool that we can use to bring visitors to the West of Ireland. It does not matter if we have to pump a 3 or 4 million into it every year. You have to look at the bigger picture.

Even if it costs us 1 million to bring in an extra 10k tourists then thats a great return. The Airport might lose money, but we'll get it back 2 or 3 fold in the hotels, food, drink etc etc etc.

True, but who is going to pay the money into it? The government aren't allowed to, as it would be classed as unfair competion to the other private airports in the country like Galway and Kerry.

Figure out how to run Shannon, at a loss without the DAA picking up the tab, and then they'll be able give away services for free. Until then, they'll have to charge for the services they provide.

The only thing the government could do is remove taxes etc. to make the prices more attractive to tourists. This is of course what MOL had been saying. Not that it will much difference to his passengers if he doesn't put on the flights to Ireland.

CptSternn

Run_to_da_hills wrote: »

Look the Lynch Group, they are BUST now, what will be next ?

True, but then again this is also another crisis waiting to happen.

By that I mean hotels in receivership.

The Times did a piece on this a while back and it has been mentioned on a few sites. It's like this -

Currently hotels are protected under some legislation to keep them from totally closing. If your hotel is hurting and goes into receivership, you get tax credits to offset the losses. If you own other businesses or hotels you can then use your tax credits to offset the amount of tax you pay there.

You end up with zombie hotels. People first complained because they could run at below operating cost and thereby hurt other hotels. That was the first problem. The bigger issue now is like the one you see in Kilmainham @ the Hilton there - they intentionally cut staff, raised prices, and are trying to scare off customers as by staying in receivership they can offset all the tax they pay to the government for their other establishments in the city.

If the government reverses this policy many hotels will close overnight. If they don't then they are allowing many big businesses to use a loop hole to get by without paying much tax. Either way it's a crisis waiting to happen.

So per the Lynch Group, I wouldn't be too worried as they might just be gaming the system right now so to speak. Letting a couple hotels stumble a bit in todays economy means you can make out like a bandit if you have other investments.

BnB

5h4mr0(k wrote: »

...Figure out how to run Shannon, at a loss without the DAA picking up the tab, and then they'll be able give away services for free. Until then, they'll have to charge for the services they provide....

Well that's it exactly. I know the government can't just blindly pump money into it because of competition laws etc.... But that doesn't mean that we just write the thing off.

I don't think the DAA are doing anything at all to try and keep Shannon alive. We need to get the right people sitting around a table to try and thrash out a plan for what can be done. IMO one of those people has to be Michael O Leary. I'm not a big fan of him (although I do admire a lot of what he has done) but sometimes you have to dance with the devil. Calll his bluff. Get him to sit down at the table for hard talks. Look at what is he proposing. If it is not possible, show him why and see does he have an alternative.

Maybe the truth is as Golfball said, that Shannon is doing the right thing in building up a nice steady profile of routes staying away from Ryanair.
And if that is the case, then so be it. I would accept that if that was an informed choice that was made by people who had the best interest of Shannon Airport and the Mid West Region at heart.

But the DAA are not those people.

ClareVisitor

Haven't we been down the road of relying on Ryanair to drive traffic through Shannon before? Broken promises and then an acrimonious court case is what ensued.

The latest Ryanair proposal is typical O'Leary PR tactics, he knows that his proposals will never be accepted and he's just looking to make mileage out of it. If O'Leary is serious about wanting more routes in Shannon he'll be back with a realistic proposal.

BnB

ClareVisitor wrote: »

Haven't we been down the road of relying on Ryanair to drive traffic through Shannon before? Broken promises and then an acrimonious court case is what ensued.

The latest Ryanair proposal is typical O'Leary PR tactics, he knows that his proposals will never be accepted and he's just looking to make mileage out of it. If O'Leary is serious about wanting more routes in Shannon he'll be back with a realistic proposal.

I'd agree completely. He is currently just using Shannon Airport as another stick to beat the DAA with in the media. Thats no good to anyone. That's exactly why I would say, call him in and call his bluff. If he is genuinely interested in getting traffic to shannon, sit down at the table and lets try and hammer something out. I don't know what would come out of it, but it is surely one of the options that needs to be looked at.

dasium

BnB wrote: »

I'd agree completely. He is currently just using Shannon Airport as another stick to beat the DAA with in the media. Thats no good to anyone. That's exactly why I would say, call him in and call his bluff. If he is genuinely interested in getting traffic to shannon, sit down at the table and lets try and hammer something out. I don't know what would come out of it, but it is surely one of the options that needs to be looked at.

I agree with this sentiment, Shannon Airport Authority (ie DAA) has nurtured a relationship with the Aer Lingus/Aer Arann combo.... in the long term, it is both benefitial to both the local area and the airport that this more stable combination is encouraged... it is stability that local businesses need.. not the whims of Mr O Leary...

CptSternn

dasium wrote: »

I agree with this sentiment, Shannon Airport Authority (ie DAA) has nurtured a relationship with the Aer Lingus/Aer Arann combo.... in the long term, it is both benefitial to both the local area and the airport that this more stable combination is encouraged... it is stability that local businesses need.. not the whims of Mr O Leary...

Beneficial for who? How? The airport is dying, losing routes every few months. Compared to a few years ago there is nowhere you can really fly to in Europe or America from Shannon any more. Even the costs are restrictive in the sense that you can drive to Dublin and fly out to many of the same destinations which haven't yet been cut and it's cheaper than flying from Shannon.

golfball37

If Ryanair are allowed this deal of O'Leary's making then they drive all the existing Shannon Airport customers away from Shannon as they offer cheaper routes from the same places.

Anyone who thinks this is a good thing frankly needs their head examined imo.

If a Ryanair deal is on the table for alternative routes at the same price then I'd be massively in favour of pursuing it as it won't effect current business at Shannon airport.

You either want a viable airport with the possibilty of growth in the region or a quick fix that gets some money into the local economy but kills the airport off ultimately?

Its a tough conumdrum. I know things are bad at the moment but a few tourist dollars isn't the answer to the mid wests problems. Sustainable jobs and industries [such as an Int airport] are imo.

phill106

dasium wrote: »

I agree with this sentiment, Shannon Airport Authority (ie DAA) has nurtured a relationship with the Aer Lingus/Aer Arann combo.... in the long term, it is both benefitial to both the local area and the airport that this more stable combination is encouraged... it is stability that local businesses need.. not the whims of Mr O Leary...

Aer Lingus have shown that they are more worried about profits then the people of shannon. Remember them moving all the shannon-heathrow slots to belfast, rather then a slot or 2 from each airport? Nice relationship there alright.

Whats happening

Let's look back at what kicked off this latest Ryanair / DAA tit for tat..

"Ryanair has rejected an offer from the DAA of more than €60 million worth of discounts on airport charges over the next five years to stimulate increased traffic into Dublin, Cork and Shannon airports.

Negotiations between the two companies ended today after Ryanair’s insistence that it be paid more than €100 million in discounts, with no guarantee of any additional traffic for the DAA’s airports.
The airline also wanted to be paid more than €10 million in discounts for existing passengers at Dublin Airport.
Ryanair’s proposal to the DAA could potentially have seen the airline being financially rewarded for reducing traffic at Cork and Shannon airports and transferring it to Dublin Airport.
The DAA had initially proposed that Ryanair would receive more than €50 million in discounted airport charges if it delivered an incremental growth of four million passengers at Dublin Airport over the next five years.
This offer was subsequently improved to €60 million in incentives for the increase in traffic.
Ryanair rejected the improved offer and continued to demand that any deal be worth €100 million in subsidies and not involve a guarantee of extra traffic.
The DAA’s Chief Executive Declan Collier said the DAA could not accept a deal where an airline could potentially receive millions in incentives in return for no commitments on increasing passenger traffic at its airports.
“We have offered Ryanair generous discounts worth more than €60 million if the airline delivers the new passengers that it claims it can,” he said. “Our aim is to encourage additional passenger traffic for Dublin Airport and for the country as a whole, but Ryanair was unable to provide any guarantee that the traffic it would deliver under its proposal would be additional.”
“Agreeing to the Ryanair proposal would mean that DAA could potentially pay Ryanair €100 million in incentives for no overall passenger growth and no extra inbound tourists,” he added. “The DAA was therefore unable to accede to Ryanair’s unrealistic and unsustainable proposal.”
As part of any deal, Ryanair also wanted to be paid more than €10 million in subsidies for existing passengers, despite the fact that the DAA’s incentive schemes are designed to stimulate traffic growth.

The DAA has also rejected Ryanair’s claims that it did not properly respond to the airline’s proposal.
The DAA has stressed it sought clarification from Ryanair in relation to several issues surrounding its proposal on a number of occasions in recent weeks but Ryanair declined to provide answers to these requests."


So DAA offers Ryanair €60M in discount, Ryanair reject and come back looking for the near impossible.. And as already said this is only a short term fix for Shannon as Ryanair recently had to pay €3.6M to DAA/SNN over a previous agreement that they failed to deliver...!

chucken1

last night Vincent Cunnane, a director of the Shannon Airport Authority (SAA), issued an open invitation to Mr O'Leary to talk to airport management about new business.
"Michael O'Leary is welcome in the offices of both the SAA and the DAA (Dublin Airport Authority). Let's talk - the door is always open," Mr Cunnane said.
"We have had our issues now over the past few months with the court case and rhetoric on both sides.


Read more: http://www.belfasttelegraph.co.uk/business/business-news/lossmaking-shannon-airport-offers-olive-branch-to-ryanair-after-row-15103331.html#ixzz1Fe3arInx

highlydebased

golfball37 wrote: »

If Ryanair are allowed this deal of O'Leary's making then they drive all the existing Shannon Airport customers away from Shannon as they offer cheaper routes from the same places.

Anyone who thinks this is a good thing frankly needs their head examined imo.

If a Ryanair deal is on the table for alternative routes at the same price then I'd be massively in favour of pursuing it as it won't effect current business at Shannon airport.

You either want a viable airport with the possibilty of growth in the region or a quick fix that gets some money into the local economy but kills the airport off ultimately?

Its a tough conumdrum. I know things are bad at the moment but a few tourist dollars isn't the answer to the mid wests problems. Sustainable jobs and industries [such as an Int airport] are imo.

The problem is even with alternative routes they will still have a massive dominant presence which will deter many potential customers. They cannot for example tell the airline- you can only operate to x y and z..... There is no telling for example, if Lufthansa were to start a service to Frankfurt (unlikely) would Ryanair launch a thrice daily service to Hahn in retaliation? It's the "not in my backyard" approach they've employed for so long. Remember easyjet, flybe, HLX etc all operated from Shannon? Ryanair drove them all out.

dr.fuzzenstein

golfball37 wrote: »

There's no long term sustainable future for the Ryanair model, we're only 1 tragedy or 1 middle eastern revolution away from the whole aviation industry being turned on its head, not to mention a current global economic downturn. Shannon should not take any Ryanair routes that go within 100 miles of existing destinations as we have seen how Ryanair do loyalty. Whats to say they won't pull out of Shannon again and then what are we left with?

Well, you can't do business with the attitude "this won't work forever, better not bother in the first place".
You have to take what's there, but don't rest on your laurels, think of future opportunities and plan for them.
Having said that, Ryanairs offer may be a little cheeky and I'm sure they pitched it, knowing it would be turned down.
I'm sure there will be some negotiations and a deal might be hammered out.
Or at least that's what would happen if Shannon wasn't run by Dublin.
Why would Dublin want 1 million people diverting somewhere else and spending their money there? They'd have to be crazy!
Shannon is dependent on the DAA because for years they have made decisions for Shannon that would ensure the airport would always teeter on the brink of ruin.
Does anyone know here how many flight go from Shannon to Germany?
Zero.
That's right, Zero!
An entire market of nearly 90 MILLION tourists and business travellers ignored.
Words fail me.
To completely freeze out the single biggest source of tourism and business for the west in all of Europe can only be described an act of lunacy.
You could deliver a million tourists from Germany alone.
Hell, if I was in charge I could arrange that deal and I know zilch about arranging airline deals.
But for some reason I seem to know more than whoever arranges these things.
That can only mean two things:
1: He's either dead, insane or a tub of yoghurt (or all three)
or
2: he doesn't want that business to go to Shannon...