Ryanair Calls for an End to t

RNS Number : 9841U

Ryanair Holdings PLC

21 May 2008

 



RYANAIR CALLS FOR AN END TO THE €45M PSO SUBSIDIES

GOVERNMENT SUBSIDY OF UP TO €100 PER PASSENGER UNJUSTIFIED

CHEAPER TO SEND PASSENGERS BY TRAIN OR TAXI!

Ryanair, Ireland's largest airline, who recently won the tender for the PSO (Public Service Obligation) subsidy on the Dublin-Kerry route, today (Wednesday, 21st May 2008) called for the ending of the PSO subsidies, which amounts to €45m (€15m per year). These subsidies are unnecessary and unjustified in an era of improved motorways and train services from the regions to Dublin and which at up to €100 per passenger do nothing more than subsidize uneconomic air routes, for uneconomic regional airlines.  This €45m could be far better spent in Ireland's healthcare service or education system.

Figures released by the Department of Transport to the Irish Independent last week show that the new PSO subsidies from Dublin to the regions will result in the Irish tax payer giving a direct subsidy of a staggering €45m - that is up to €100 per passenger to  business passengers travelling on uneconomic air routes to and from the Irish regions.  It would be cheaper to pay these people to go by train or taxi to Dublin.  These subsidies are unjustified at a time when the motorway network and rail connections to the regions have significantly improved and each of these regions is served by a low cost, readily available bus service.

It is only thanks to Ryanair's intervention that the subsidy on the Dublin-Kerry route has been reduced by over 40% from €9m to €5.2m. However, the subsidy on other routes has remained either unchanged or has increased by 9%/10%. This subsidy payment to Aer Arann/Cityjet equates to €72 per passenger on the Sligo and Donegal routes, and almost €100 per passenger on the uneconomic and barely used Derry and Knock routes.

Route (Operator)	PSO Subsidy (3 Yrs)	PSO Pax (P.A.)	Subsidy Per Pax (PA)
Derry & Knock (Aer Arann & Cityjet)	€12,433,731	41,745	€99.29
Sligo & Donegal (Aer Arann)	€16,924,570	78,912	€71.49
Galway (Aer Arann)	€10,016,393	72,944	€45.77
Kerry (Ryanair)	€  5,250,000	97,557	€17.94
Total Subsidy	€44,624,694

Calling today for an end to PSO subsidies, Ryanair's Michael O'Leary said:

'It is crazy for the Irish taxpayer to be subsidizing these regional routes to the tune of €45m or almost €100 per passenger. Given the improvements to national motorways and the increased frequency of rail services to the regions, these subsidies are unjustified and totally unnecessary.   This money could be better spent on our healthcare service or education system. Just think how many additional school classrooms, Special Needs Assistants or how many hospital beds could be funded by this €45m?

'If unjustified subsidies are available, then Ryanair is right to apply for and win them. We have reduced the subsidy on the Kerry route by over 40% from €9m to just over €5m, saving the Irish tax payer almost €4m.

  'At a time of increasing pressure on public spending, we call on the Department of Transport to confirm that this latest round of PSO subsidies (which runs from 2008 to 2011) will be the last of these unjustified handouts. The Department should send a clear signal to regional airlines and regional airports that the taxpayer is no longer willing to write cheques for €45m or up to €100 per passenger to fund air services with tiny numbers of passengers, which wouldn't exist without these crazy subsidies. It would be cheaper for the Irish Government to provide free bus, rail or taxi fares to these very few passengers, as they would save a fortune versus the current €45m PSO handouts.

'There may have been a time 10 or 20 years ago when the road and rail networks of Ireland were so poor that air connections to the regions were justified.  Not any more.  Ryanair believes these subsidies should be terminated. If Aer Arann and others can't survive without these massive tax payer subsidies for unnecessary routes, then they should redeploy their aircraft to develop economic routes to/from Ireland that don't depend on €45m taxpayer subsidies. We believe the Government should save this money and spend it where it is most needed in the regions, namely providing additional hospital beds or classroom facilities for this country's young people.

'In order to emphasise Ryanair's refusal to levy fuel surcharges, our guarantee of lowest fares and to show that the Consumers Association of Ireland is talking rubbish as usual, when bleating on about non-existent hidden charges (which are most definitely not 'hidden' and are discretionary/avoidable), Ryanair today released 300,000 free seats (that is no taxes, no fees and no charges for the idiots in the CAI) for travel on selected flights on Mondays to Thursdays in June.  Even the bewildered officials of the CAI can find these free seats with no hidden charges by checking on www.ryanair.com.  Perhaps the misguided CAI would now address the real rip off of consumers which comprises non-discretionary fuel surcharges and ever increasing costs being fleeced from passengers at Dublin Airport, where parking charges again rose recently by 50% without even a murmur from the Government funded CAI'.

Ends.                             Wednesday, 21st May 2008

For reference:                Lorna Farren - Ryanair       Pauline McAlester - Murray Consultants

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