Big guns join Kerry battle of the skies

RYANAIR and CityJet have joined in a three-way fight to try to prise a €5 million-a-year State subsidy for operating the Kerry-Dublin air route from Aer Arann.

If Ryanair succeed in winning the three-year contract, the low-cost carrier could route 300,000 extra passengers a year through the airport, where Aer Arann currently handles close to 120,000 passengers.

A successful CityJet bid would result in close to 230,000 passengers on the route, according to industry sources.

However, it is understood that Aer Arann will have to substantially reduce its tender price of €5m if it is to retain the public service contract on the route under the Essential Air Services Programme (EASP).

Aer Arann has earned an estimated €18.2m in public service contracts last year. The subsidy on the Kerry route equates to about €55 per passenger.

Industry sources suggest a successful Ryanair bid could result in direct competition for Irish Rail and provide a valuable point of entry to Kerry.

It is understood there are two other tenders for the lucrative Kerry route but that the competition will most likely boil down to a fight between Aer Arann, CityJet and Ryanair. Final tenders have been submitted to the Department of Transport and a decision is expected in May, with the new operator taking over the route later this year.

Six routes are subsidised under the EASP.

The department said it had received a number of proposals for all the internal routes covered by the public service obligation, which provides subsidies for flights from Kerry, Galway, Knock, Sligo, Donegal and Derry to Dublin.

It is understood that Ryanair has only tendered for the Kerry contract, where the carrier also operates daily flights to Frankfurt-Hahn and London Stansted. Aer Arann has come in for criticism from the Kerry Airport Company, with chairman Denis Cregan criticising the carrier for running late on a number of occasions, causing delays for passengers.

An Aer Arann spokesperson said the company provides a service over and above the terms of the EASP contract, has resolved the delay issues with Kerry Airport and is hopeful of retaining the contract.