Ryanair discusses its future at Shannon
It is five years since Ryanair signed its current base agreement with Shannon Airport. Under the terms of the agreement which runs out in April 2010, the airline has invested $400m in based aircraft and grown its passenger numbers at the airport from 300,000 in 2004 to 1.9m in 2008.
Ryanair has said that since the Irish government introduced its €10 travel tax on April 1 last passenger numbers have declined at Shannon. Last winter the airline based 6 aircraft at the airport, reducing its strength to four during summer 2009 and proposes just three frames this coming winter. Ryanair has on numerous occasions in the past four years stated that its Shannon operation has lost money in each of the five years of the current agreement.
In spite of these losses, Ryanair has written to the Shannon Airport Authority (SAA) confirming that if the government drops the travel tax by February 1 next and if the SAA extends the airline's cost base for a further five years then Ryanair will "commit to delivering more than 1.2m passengers annually, on up to four based aircraft". If both conditions are not met Ryanair has promised to reduce its base strength to one aircraft operating the London and some provincial UK routes and delivering just 300,000 passengers annually.
Shannon faces into the coming winter with a bleak future and a large drop in revenue on the horizon. Delta Airlines and US Airways terminated their transatlantic services in recent weeks. Cityjet terminated its Paris route this weekend past and Aer Lingus is as good as terminating its transatlantic services next spring. On top of that the €20m US Customs & Border Protection facility is rapidly turning into a white elephant. Aer Lingus has refused to use it for 'operational' reasons and USCBP won't increase the manning levels to give 24-7 operations since the passenger numbers aren't there to justify it. With a handling fee of just €10.50 per passenger cleared, a significant throughput is required to make the facility pay for itself.