Ryanair critical of Aer Arann subsidies

THE Department of Transport has been accused of wasting millions of taxpayers’ money through excessive subsidies to Aer Arann.

Making the claims, Ryanair chief executive Michael O’Leary pointed out that his airline offered to serve the Dublin to Knock route for a fraction of the cost of Aer Arann, with more seats and lower fares.

Earlier this month, the High Court granted Ryanair’s application for a judicial review of a department decision to grant a PSO (Public Service Obligation) contract for the Dublin to Knock route to Aer Arann.

This followed Cityjet’s decision not to serve the route. Mr O’Leary said: “EU law requires the department to call for a new tender process, but it failed to do so. Following another damning report into civil service waste by the Comptroller and Auditor General this week, Ryanair believes it is high time that the department stops wasting taxpayer’s money on excessive and unnecessary subsidies to Aer Arann.”

He said over the past seven years, the Government wasted more than €100m on PSO subsidies, primarily to Aer Arann.

Ryanair’s director of legal affairs Jim Callaghan said: “For years, Ryanair has been a vocal critic of the Department for Transport’s waste of taxpayer funds in the area of PSOs and this is just the latest example. The report of the Comptroller and Auditor General yesterday highlights the extreme waste in the Government’s spending generally and PSO subsidies are a clear example of this. The Taoiseach, Brian Cowen, yesterday confirmed that the Government would no longer tolerate this kind of waste.”

Mr Callaghan said Ryanair offered to serve this route at a lower cost than Aer Arann and with three times the capacity, and yet the department turned this down.

“There clearly should have been a further tender under EU rules and this is why Ryanair has been forced to apply for a judicial review in the High Court. Ryanair today re-issued its offer to the department to serve the Dublin to Knock route for a lower cost, with lower fares and triple the capacity,” he said.


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