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News : Irish Last Updated: Mar 31, 2011 - 6:15 AM


Anti-travel tax levy Ryanair to scoop €140m from new passenger compensation levy
By Finfacts Team
Mar 30, 2011 - 3:38 PM

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Ryanair which has loudly campaigned against the €10 Irish travel tax levy, has today introduced a new €2 levy per passenger compensation levy which in a full year, would be worth at least  €140m.

The new levy which will add to the raft of existing charge add-ons will apply to all bookings made from Monday 4th April 2011 "in order to fund its costs of flight cancellations, delays and its EU261 costs in 'force majeure' cases where the airline is not responsible for either the delays or cancellations."

Ryanair is lucky in these recessionary times to have option of raising its fares and the EU compensation issue is as good an excuse any any, as a justification.

The airline said that over the past year it has suffered costs of over €100m arising from flight cancellations, delays and providing right to care, compensation and legal expenses arising from more than 15,000 flight cancellations and over 2.4m disrupted passengers, with the majority of these claims arising in three periods during which Ryanair was prevented from flying by the failure/inaction of third parties including:

a) the Icelandic volcano airspace closures of April/May 2010,
b) the snow closures of many EU airports during November/December 2010,
c) over 15 days of national ATC strikes, primarily in Belgium, France, Germany and Spain in summer 2010, which caused repeated flight delays and cancellations.

Ryanair carried 72m passengers in 2010; so it is likely to gross €140m from the levy in 2011 and will make a tidy profit, absent natural disasters.

Ryanair’s Stephen McNamara said:
“The EU261 regulations are clearly discriminatory in the way they are applied to airlines, by making airlines responsible for delays, cancellations and right of care expenses during force majeure events such as volcanic eruptions, the snow closure of airports and the frequent ATC strikes across Europe. Despite repeated calls, the European Commission and EU Governments have still failed to make Europe’s ATC services an essential service, which (like their U.S. ATC counterparts) should not have the right to strike.

“ It is clearly unfair that airlines are obliged to provide meals and accommodation for passengers (for days and weeks in some cases), simply because governments close their airspace, or air traffic controllers walk off the job, or incompetent airports fail to clear their runways of snow. When the EU261 regulations were first introduced, airlines were assured that they could recover the cost of these cancellations and delays from those parties who caused them.

However the airlines have no right of recovery from Governments (when they close airspace), ATC unions (when they repeatedly walk off the job), or airports (who can’t even clear snow off their runways). It’s a crazy situation that travel insurance companies paid out nothing during the volcanic ash crisis last year (because it was an 'Act of God'), yet the airlines were forced to pick up weeks of delays, cancellations, hotel and restaurant costs."

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© Copyright 2011 by Finfacts.com

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