Ryanair: Government failed to act to save Kerry service

RYANAIR has accused the Government of failing to act to save the airline’s Kerry-Dublin service because it favours the semi-state companies to private sector organisations.

The airline is to reduce the three-times-daily service to once daily from November 13 because, it claims, Transport Minister Noel Dempsey won’t reimburse Ryanair the additional costs which it says it is entitled to reclaim under the Public Service Obligation contract under which the service is operated. Ryanair was to be paid €1.7 million a year under the PSO contract to provide the service. In 2008, Ryanair outbid Aer Arann for the three-year contract by more than €1m.

In its latest attack on Mr Dempsey over the issue, Ryanair pointed out that the Government had increased Bus Éireann’s PSO subsidy to reflect the bus company’s higher costs.

Ryanair called on Mr Dempsey to explain:

* Why the Government has imposed annual cost increases of €660,000 per annum after the July 2008 start of the PSO contract, but refuses to reimburse Ryanair for the increased costs?

* Why he has failed to respond to Ryanair’s offer to continue the three daily flight service for the last eight months of the contract, if he reimburses the €440,000 of these higher costs for the last eight months?

* Why he has failed to take up Ryanair’s offer of binding arbitration, if, as he claims, Ryanair is in breach of the contract?

* Why he has increased Bus Éireann’s PSO subsidy to reflect CIÉ’s increased costs, yet refuses to increase the payments to Ryanair to reflect cost rises (passenger tax, DAA and IAA charges) for which the Government are directly responsible?

“Yet again with Noel Dempsey and the Department of Transport there’s one rule for the semi-state monopolies, and a different rule for private sector competitors,” said spokesman Stephen McNamara. “The sole reason for the reduction (in the Kerry service) is Mr Dempsey’s still unexplained failure to reimburse Ryanair the additional costs which we are entitled to reclaim under the PSO contract. Mr Dempsey has failed to respond to Ryanair’s written offers to continue this service. If Ryanair was in breach of contract as he claims, then surely Minister Dempsey would take up our offer of binding arbitration. If Minister Dempsey fails to act, then we will continue to serve the Kerry-Dublin route with one daily return flight departing from Kerry early in the morning and returning from Dublin in the late afternoon, which will allow the people of Kerry to complete a day’s work in Dublin without drawing any subsidy whatsoever from taxpayer funds.”

Earlier this month, in this newspaper, Mr Dempsey said the Ryanair bid for the PSO was “curiously low” and he questioned the airline’s motives for trying to get out of it now.


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