Case Study Ryanair
RYANAIR LIMITED
RYANAIR LIMITED SUBMISSION TO THE COMMISSION FOR AVIATION REGULATION ON THE DETERMINATION OF AIRPORT CHARGES 27 MARCH 2001 Table of Contents 1. Introduction 2 2. Background on Ryanair 5 3. Background on Aer Rianta's Charging Policy 9 4. Key Issues 14 5. Comments on the Statutory Background 15 6. Submissions on Questions raised 20 Confidential Annex (Separate Document) - WITHHELD 1. INTRODUCTION This paper sets out Ryanair's submissions on the determination of airport charges by the Commission for Aviation Regulation (the "Commission") by reference to the Commission's paper entitled "Economic Regulation of Airport Charges in Ireland" (the "Consultation Paper"). The welcome appointment of the Commission comes at a critical juncture in the development of the air transport industry in Ireland when costs at the Irish airports controlled by Aer Rianta cpt ("Aer Rianta" or the "Airport Operator") have been escalating, whereas the level of service provided is unacceptably low. This has had a markedly negative effect on traffic volumes over the past year, particularly as regards travel from the United Kingdom, Ireland's largest market, which has stagnated at a time when Sterling has never been stronger. This stagnation in traffic and the absence of airlines willing to develop new routes in the current environment have wider implications than just the profitability of the Airport Operator or the airport users ("Users"). More importantly, this situation affects the strength and development of the Irish economy as a whole given the vital nature of air access for a peripheral island nation. Given the recent shocks to the Irish economy, including the downturn in the US economy and the outbreak of foot and mouth disease, the development of air transport is a crucial factor in sustaining the strength of the Irish economy. The foot and mouth crisis also points to the danger of over reliance on the UK market for air transport services. Currently, 57% of Irish air
RYANAIR LIMITED SUBMISSION TO THE COMMISSION FOR AVIATION REGULATION ON THE DETERMINATION OF AIRPORT CHARGES 27 MARCH 2001 Table of Contents 1. Introduction 2 2. Background on Ryanair 5 3. Background on Aer Rianta's Charging Policy 9 4. Key Issues 14 5. Comments on the Statutory Background 15 6. Submissions on Questions raised 20 Confidential Annex (Separate Document) - WITHHELD 1. INTRODUCTION This paper sets out Ryanair's submissions on the determination of airport charges by the Commission for Aviation Regulation (the "Commission") by reference to the Commission's paper entitled "Economic Regulation of Airport Charges in Ireland" (the "Consultation Paper"). The welcome appointment of the Commission comes at a critical juncture in the development of the air transport industry in Ireland when costs at the Irish airports controlled by Aer Rianta cpt ("Aer Rianta" or the "Airport Operator") have been escalating, whereas the level of service provided is unacceptably low. This has had a markedly negative effect on traffic volumes over the past year, particularly as regards travel from the United Kingdom, Ireland's largest market, which has stagnated at a time when Sterling has never been stronger. This stagnation in traffic and the absence of airlines willing to develop new routes in the current environment have wider implications than just the profitability of the Airport Operator or the airport users ("Users"). More importantly, this situation affects the strength and development of the Irish economy as a whole given the vital nature of air access for a peripheral island nation. Given the recent shocks to the Irish economy, including the downturn in the US economy and the outbreak of foot and mouth disease, the development of air transport is a crucial factor in sustaining the strength of the Irish economy. The foot and mouth crisis also points to the danger of over reliance on the UK market for air transport services. Currently, 57% of Irish air