THE DUBLIN Airport Authority (DAA) yesterday rejected a proposal from Ryanair that offered to grow passenger traffic at Dublin airport by four million over the next five years.
The DAA said Ryanair had insisted it be paid more than €100 million in discounts with no guarantee of any additional traffic.
The airline also wanted €10 million in discounts relating to existing passenger traffic at Dublin airport, the DAA added.
“We have offered Ryanair generous discounts worth more than €60 million if the airline delivers the new passengers that it claims it can,” DAA chief executive Declan Collier 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.
“[The] DAA was therefore unable to accede to Ryanair’s unrealistic and unsustainable proposal,” Mr Collier added.
Ryanair chief executive Michael O’Leary rejected the DAA’s claims: “We offered to grow the passenger numbers by four million and they’ve turned us down”.
“Where are they going to get growth from? Aer Lingus has no new routes out of Dublin.”
In a letter sent to Declan Collier on December 22nd, Mr O’Leary said Ryanair would base an additional aircraft at Dublin from April 2011. He said they would also play the full published charges up to a threshold of 7.5 million passengers, which is the number flown by the airline at Dublin in 2010.
Once that threshold had been achieved, the passenger charge would be reduced to €1.80 per departing passenger on all incremental traffic.
In addition, Mr O’Leary wanted the DAA to pay Ryanair €6 for every departing passenger in excess of 7.5 million.
Under his proposal, Ryanair would have grown its traffic to 9.5 million this year, to 10 million in 2012, 10.5 million in 2013, 11 million in 2014 and 11.5 million in 2015. Ryanair also wanted the DAA to more than halve the €530,000 annual rental fee it pays for its head office at Dublin airport for the five-year period.
Ryanair said its proposal reflected the existing terms of the DAA’s transfer incentive scheme.
In his letter, Mr O’Leary said his proposal would reverse “almost all of the traffic collapse suffered by Dublin airport since the DAA began substantially increasing airport charges in 2008”.
The DAA wanted Ryanair to accept the terms of its growth incentive scheme, which results in airlines receiving a rebate on passenger charges if a certain annual passenger threshold is reached at the airport.
Some of the rebate would be distributed to other airlines based on their proportion of traffic.
But Ryanair does not want to share the rebates relating to any traffic growth it brings to Dublin.
In a letter sent to Mr Collier yesterday, Mr O’Leary said: “Even if Ryanair delivered 2 million incremental passengers, 60 per cent of the growth discounts applicable to that Ryanair growth will be allocated to our non-growth competitor airlines. This is not only commercially daft but also anti-competitive.”
He told Mr Collier he was “astonished” by the DAA’s rejection of his growth proposal.