Ryanair vs Boryspil: Airport states own position, says prepared for audit  Business  12-Jul-2017 17:40  0  2633 reads


The leadership of Ukraine's largest state-owned international airport Boryspil has announced its readiness for audit of the negotiation process with the Irish-based low-cost air carrier, Ryanair, over its economic feasibility and legal correctness, according to the company's press service. "On its part, the Boryspil Airport is ready for any audit of the negotiation process with Ryanair over economic feasibility and balanced position of the airport’s management, as well as legal correctness and non-discrimination of the airport's other contractors from the position of the economic competition protection legislation," the report said.

The press service noted that airport CEO Pavlo Ryabikin is ready to bear responsibility for all decisions taken during the negotiation process with the air carrier in question.

"The airport CEO, who was elected on a competitive basis, is guided by Ukrainian legislation, the contract, and the company's charter," the press service said.

As reported, the Boryspil Airport at the beginning of the talks with Ryanair repeatedly expressed certain reservations on the impossibility of meeting the air carrier’s financial expectations in full due to the specifics of Ukrainian legislation and the conflict of models of a low-cost airport and a hub like Boryspil.

"We note that the practice of Ryanair entering into a major airport is not traditional for the launch of flights of the said carrier in other countries, as evidenced by the analysis of its flight map and earlier unsuccessful negotiations with another Kyiv-based airport," the press service said.

Moreover, the Boryspil Airport deliberately reduced the rate of passenger fees from $17 to $13 for all air carriers to meet Ryanair's requirements.

"The rate of this fee is set by the order of the Infrastructure Ministry. Ryanair could not receive the expected $7.5 per passenger without the relevant amendment, the press service reported.

In addition, taking into account Ryanair's expectations, Boryspil changed the public offer rate, establishing an 80% discount from the base passenger charge on new flight destinations.

"We have repeatedly expressed our position that the airport agrees to co-invest in a new destination by providing a 80% discount only in case if the air carrier guarantees to increase passenger flow for this destination and the geography of flights," the report says.

The press service noted that the latter was the point of the negotiations on which Ryanair had not been accepting the arguments from the very beginning of talks.

"In particular, we insisted - and continue to do so - that flights to London cannot be covered by a 80% discount since flights are already underway in this direction," the report said.

Furthermore, Boryspil will not be able to fix the fee for Ryanair passengers at the level of $7.5 as it depends on the provision and increase of passenger traffic for this destination.

"This position was unacceptable for representatives of the low-cost air carrier. We officially declare guarantees of passenger traffic to the tune of 150,000 passengers, which accounts for 1.5% of the projected passenger traffic in Boryspil for this year," the report said.

The press service also confirmed that the terms of the Boryspil Airport’s incentives program are open, public, and could be used by all air carriers that are interested in flying to and from Boryspil.

"Under the terms of the discounts, the airport should receive from air carriers guarantees for the expansion of the flights geography (new flights) and the increase in passenger traffic in the relevant areas during the grace period," the report said.

As reported earlier, Ryanair on March 15 announced the launch of its 11 flights from Kyiv and Lviv starting October 30, 2017. However, due to high demand for tickets, the schedule for certain flights, in particular, from Lviv to Berlin, was shifted to earlier dates in September 2017. Ryanair then clarified that the flights would be performed from Kyiv, namely from the Boryspil International Airport, while future flights from the Kyiv International Airport would be considered as well.

Later, Ryabikin claimed he had not yet signed a cooperation agreement with Ryanair and voiced the opinion that budget airlines should be served at the Antonov International Airport near the town of Hostomel, Kyiv region, rather than at Boryspil Airport.

July 10, Ryabikin said that in case of signing a contract with Ryanair, Boryspil would suffer UAH 2 billion, or US$77 million, annual losses. He called the contract financially unfavorable for the company and refused to sign it until the airport's requirements have been taken into account.

Ryanair, in turn, said that it had canceled entry into the Ukrainian market due to non-compliance by the Boryspil Airport management with the agreement previously reached with Ukraine's Infrastructure Ministry.

On July 11, Prime Minister Volodymyr Groysman, following a meeting with the officials of the Infrastructure Ministry, the Justice Ministry, the Boryspil Airport, the Airports of Ukraine Association, and the Investment Promotion Office said that the talks with Ryanair on its entry on the Ukrainian market, stopped due to the unreadiness of the Boryspil management to take into account the company's significant preferential requirements, would be resumed.

Rating 2.86/5
Rating: 2.9/5 (72 votes)
View this article in PDF format Print article

Get Involved

Radio Free Ukraine We are currently looking for volunteers in the areas of php programming, translating, news manager and of course, On-Air personalities. Just send us a note to admin@rfu.in.ua Радіо Вільної України Мы ищем волонтеров в таких сферах как php программирование, перевод, менеджеры новостей и конечно ведущих для прямых эфиров. Пишите нам admin@rfu.in.ua
Design by: XOOPS UI/UX Team