Ryanair looks to use crisis to put squeeze on Irish airports to slash airline fees
Ryanair has written to every airport on its route network – including Dublin and Cork – looking to put the squeeze on them to lower landing and usage charges in return for more business.
Ryanair’s group chief executive Michael O’Leary said earlier this month that the airline wants “once in a lifetime airport discounts”.
Since then, Ryanair has written to all of its route network airports saying it will prioritise those agreeing to demands when it returns to flying in July. It also requested a 100% waiver on airport fees until October and significant discounts for next year.
Other low-cost European airlines – including EasyJet and Wizz Air - have sent airports similar demands in return for more levels of returning passenger traffic.
Goodbody analyst Mark Simpson said low-cost airlines will likely get better deals at airports as they are the carriers that will provide growth – quicker than their long-haul rivals - as European air travel begins to return.
EasyJet invited airports to make ‘Apprentice’-style pitches during 20-minute Skype sessions held recently “to discuss how you can and will support EasyJet to restart operations”.
“We request that you present to us your best offer, which will strongly influence how we deploy capacity,” it said, adding that bids should include “short-term restart incentives” and winter rebates.
EasyJet, whose recovery plans are less ambitious than Ryanair’s, also said it will cut up to 4,500 jobs and shrink its fleet of aircraft to adjust to the smaller travel market.
However, airports are struggling themselves with many facing failure without a meaningful recovery in summer passenger numbers. They also have bigger immediate cash flow concerns than airlines.
“The impact of the global Covid-19 pandemic is having a hugely negative impact on all businesses in the aviation sector.
"The whole aviation industry wants to begin to rebuild its business, and in that context, it would be preferable if all players worked together, rather than having one part of the industry attempting to force further revenue reductions onto another part of the sector,” said a spokesman for Dublin Airport, adding that Dublin ranks as the best value large airport in Europe – with lowering airline costs already – “by a country mile”.
“Under new pricing charges for this year, any Ryanair passenger flights that operate during the 2020 summer season, which lasts until the end of October, will have airport charges which are 23% lower than the already low charges that applied in 2019,” he said.
Olivier Jankovec, head of airport representative group ACI Europe added that "Europe’s airports are on their knees."
"They have lost more than 315 million passengers since the start of the Covid-19 outbreak and they will exceed half a billion passengers lost before the end of May. All their revenue sources have essentially dried up, most of their staff furloughed and investments stopped - yet cash is still flowing out in running costs as most have remained at least partially open,” he said.
Meanwhile, Norwegian Air has reported a widening in losses days after its creditors took control of it as part of a financial rescue.
