Ryanair’s war against Greek government, travel agents, Germany and Fraport
Greek travel agents have declared war on Irish low fares airline, Ryanair, following its decision to wrap up its summer 2016 schedule in Greece two months earlier than originally planned, according to the carrier’s chief commercial officer, David O’Brien.
The President of the Federation of Greek Associations of Travel & Tourism Agencies (FEDHATTA), Lysander Tsilidis characterized O’Brien’s reasoning behind the decision outlined in Greek newspaper Vima as “unacceptable, insulting and blackmailing to put it mildly.”
FEDHATTA president’s statement
The full statement of FEDHATTA’s president follows:
“Ryanair Commercial Director David O’Brien’s statements as reported in the press are mildly unacceptable, offensive and blackmailing to put it mildly.
This kind of behavior should not be accepted in any country and market in the world by any airline company, whose sole purpose is to secure its own benefits by creating a competitive environment favorable only to itself.
Furthermore, I consider the company representative’s characterization of the Greek Minister of Tourism as well as his accusations against her predecessors during the last two years as unacceptable and undignified.
It is very hard for us to accept that any company’s Commercial Director will not respect the institutions and instead of being polite, will be offensive and sarcastic.
Instead of being grateful for being active in our country, indirectly aided financially by municipalities and regions, for several years now, to arrange schedules that generate their company’s profit and growth, they shamelessly exploit conjectures, arising from economic and other events, and blackmail with flights’ reduction, essentially to achieve even more favorable commercial conditions.
Most infuriating is the unconstitutional reference to workers’ rights and the way in which they assert their demands and, even more so, the reference of relinquishing airspace control to neighboring countries. The only thing that the company has not asked yet is to govern the country and to determine legislation, in accordance with its interests.”
Ryanair Commercial Director’s statements
Earlier on, in an interview published in Greek newspaper To Vima on Sunday, Ryanair’s Chief Commercial Officer, David O’Brien, announced the Irish company would cut the summer season flights to Greece two months earlier than planned, starting with the island of Kos. Ryanair’s decision would leave Greece without eight flights per day and two months before the end of the season, he said.
The CCO said the airliner had proposed since early 2014 that the government reduces fees and taxes in the low season, and exempts small airports from the Airport Modernization and Development levy which amounts to 12 euros per passenger, for five years. It also proposed reducing the same tax by 50 pct for Athens’ International Airport. In return, the company pledged it could bring an additional two million passengers to Athens and another 3.5 million in regional airports. O’Brien said his company never received a negative or positive answer.
O’ Brien also described Deputy Tourism Minister Elena Kountoura as “Marie Antoinette of Greece” because to Ryanair’s proposal to increase Greece’s visitors by 5 million she replied that it was “not within her competence” to decide on this. He also claimed that there has been no government proposal to “extend the tourist season in Greece.”
“Speaking on public television, she just said it was a social tourism program, which is excellent for beneficiaries, but the tourism strategy can not be limited to the recycling of money of Greek taxpayers, “ O’ Brien said.
Attack against Germany and Fraport
He also attacked Germany and FRAPORT that has won the privatization of 14 regional airports.
“The Germans will increase the infrastructure that outside the high season will be empty. Then, as a monopoly, will raise fees for airports. They will destroy tourism island attracting more tour operators only for two months, whereas what they really need the islands are more passengers for more months.”
The CCO also expressed his concern about the creation of cartels in airport charges, since “the company that is in charge of the airports [meaning the Fraport] has already stated that charges will be at the levels of all the Mediterranean countries. In short, he says that it should be higher. ”
He said he cannot understand why the Greeks do not want to have “10 million visitors in 3 years,” and implied that the Greek government is rather afraid to insult its partners-friends and added: “It is better to have passengers without taxes than taxes without passengers.”
Ryanair is notorious for avoiding any tax hikes and in February the company decided to cut routes and jobs in Italy as a “result of a 40 percent increase in passenger departure taxes.” The carrier said that from October it would drop 16 routes and 600 jobs after the Italian government this year raised departure taxes to 9 euros ($9.81) from 6.50 euros to help subsidise layoffs at former flagship carrier Alitalia.
Last year, Ryanair’s Chief called Greek government lunatics & nutters and asked again for exemption from Athens Airport Taxes & Fees.
Greek Alternate Tourism Minister’s response
Following O’Brien’s interview, Alternate Tourism Minister Elena Kountoura refuted accusations on Monday by budget airline Ryanair that she has ignored numerous letters and pleas from the company to reduce an airport tax imposed on all airline tickets, saying that such decision lies with the ministries of Finance and Transport.
The Minister said the airliner has indeed requested repeatedly from numerous governments to reduce the airport levy and cut it altogether for Kos, but noted that she explained to the company representative that such a request will have to be raised with the competent ministries which have the authority to alter taxes.
“I have previously thanked Ryanair’s representative and I thank him once again publically for his intention to bring an extra five million passengers to Greece, in the next few years. And, of course, I stressed that I support any action that makes tourism in our country more competitive,” she said.
High quality services at high charges
Regarding Ryanair’s claims against Fraport, market insiders pointed out that the Athens International Airport (AIA) can offer very high quality services, however, the exact charges significantly reduce its competitiveness compared to other competitive airports, such as Istanbul and Barcelona.
A solution, however, to this could be found in the extension of its concession until 2046. This is because the extension of the concession period, ending in 2026, will facilitate the return on investment by the Canadian pension fund and other private shareholders of AIA, leading to a reduction of spatosimo. It has been estimated that the extension of the concession could boost, direct passenger traffic at least 20%. Consequently, the procrastination on behalf of the government in relation to the extension of the concession, keeps AIA more expensive and reduces its competitiveness.
The fees paid by air carriers for the use of airport facilities (landing, take-off, lighting, parking of aircraft, passengers and cargo) at AIA are calculated on tons of aircraft, parking privileges, service handling, etc. Hence, the fees for aircraft A320 with 100 passengers amount to over €4,100, when the corresponding amount at the Istanbul airport does not exceed €1,700-2,000.
Regarding the soon to be privatized 14 regional airports, charges currently stand at 12 euros for European Union passengers flying to any airport in Greece and 24 euros for non-European Union travelers. The tax is charged for the modernization or construction of airports in Greece. With the start of the concession of facilities to the Fraport-Slentel consortium, charges will be uniform for all categories and zones will stand at 13 euros in accordance with the commitments undertaken by the consortium. The latter, After five years, when a full upgrade of the airports will be completed, the latter will increase it to 18 euros charges per departing passenger. Even in this case, though, the fees will be lower than those at comparable airports in other countries, such as Turkey and Spain. In addition, it was recently disclosed by the head of Fraport that the goal of maximizing passenger traffic encourages the reduction, not the increase of the fee.
Nevertheless, Ryanair calls for zero charges for the period of low demand at the regional airports. This could not be easily accepted by the government, since such a practice would cannibalize the current growth and would give Ryanair precedence over companies that have invested in their continuous presence.
Aegean: “We have not received a single euro discount from spatosimo”
One of these companies implementing a long-term investment plan would be Aegean which, according to Vice President Vassilakis, managed to increase passenger numbers to almost 12 million from one million without ever enjoying a single euro discount from spatosimo, from all airports and throughout the year.
“Dozens of times we have said that the competitiveness of the charges and operation of airports and infrastructure is critical for development. Especially the Athens airport with excellent infrastructure and operation, is extremely expensive for passengers and airlines because contract concession is short. The recent signing of an agreement with Fraport for 50 years for regional airports showed that investments and public interests can keep up with the maintenance of low rates.
The same should be done with the extension for AIA concession, which the government should begin to discuss with the Canadian shareholders. More time to concessions means lower rates for passengers and airlines and charges closer to Istanbul and Barcelona, our main competitors” Mr. Vassilakis concluded.
In the meanwhile, Greek main opposition parties New Democracy and PASOK lashed out against the government for incompetence and indifference that brought about Ryanair’s decision to wrap up its summer 2016 schedule in Greece two months earlier than originally planned, which could have adverse effects on Greek tourism this year.