O’Leary: €10 airport tax will kill off Shannon

RYANAIR plans to cut its passenger numbers through Shannon Airport from two million to a mere 750,000 due to the Government’s controversial airport tax.

The airline’s chief executive, Michael O’Leary, said the reduction — brought on by the €10 departure tax announced in the budget — would doom the mid-west airport.

He said while Ryanair was to account for 60% of Shannon’s traffic this year, next year it would cut the number of aircraft based there from four to one, with the loss of 100 Ryanair jobs.

“You will see tumbleweed rolling across the ground at Shannon,” said Mr O’Leary.

“This travel tax has been badly thought out and the Government will effectively be responsible for closing Shannon Airport.”

The airport said it was in communication with all carriers at Shannon on a continuing basis, including Ryanair, and would maintain that approach.

“We have a five-year agreement with Ryanair that we are extremely happy with,” said a spokeswoman.

“We are very confident their passenger targets will be met and look forward to continuing to work with the airline beyond the existing deal, which concludes in 2010.”

However, one airport source added that Ryanair has six aircraft operating out of Shannon, serving 35 destinations, that the airline had committed to raising passenger numbers to two million by 2010 and the airport was determined the agreement would be honoured.

Shannon Airport is already reeling from the loss of its Heathrow slots and the proposed withdrawal of 300 of its staff by Aer Lingus. The cut in services by its main remaining airline would be devastating.

Meanwhile, Mr O’Leary blasted the budget as a “wasted opportunity” and warned, if taxes continued to rise, he may have to consider shifting his tax base from Ireland.

The chief executive also predicted Ryanair would be making annual profits of €800 million in five years’ time and will be carrying 100 million passengers.

Ryanair is expecting to only break even in its current financial year, mainly due to earlier high oil prices.

However, if oil prices stay under $100 a barrel, profits will rise significantly in the coming years.

Earlier this year, Ryanair was caught off guard, paying high prices for oil after failing to hedge when the price was low.

“Looking back it was stupid not to hedge on oil but we’re not hedged for the remainder of the year and that’s a good move,” said Mr O’Leary.


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