Ryanair 2012 Annual Report Download - page 66

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and inform management of any instance of an operational limit being exceeded. By analyzing these reports,
management is able to identify undesirable trends and potential areas of risk, so as to take steps to rectify such
deviations, thereby ensuring adherence to Ryanair‘s flight safety standards.
In November 2008, a Ryanair aircraft suffered a multiple bird strike during its final approach to Rome
(Ciampino) airport. This incident caused substantial damage to the aircraft, which resulted in an insurance claim
being filed in respect of this aircraft. The damage that it suffered was such that the aircraft was not repaired. It is
scheduled as a ―disposal‖ in the table on page 91, although Ryanair has retained ownership of it for certain parts
and for training purposes.
AIRPORT OPERATIONS
Airport Handling Services
Ryanair provides its own aircraft and passenger handling and ticketing services at Dublin Airport.
Third parties provide these services to Ryanair at most other airports it serves. Servisair plc provides Ryanair‘s
ticketing, passenger and aircraft handling, and ground handling services at many of these airports in Ireland and
the U.K. (excluding London (Stansted) Airport where these services are provided primarily by Swissport Ltd.),
while similar services in continental Europe are generally provided by the local airport authorities, either
directly or through sub-contractors. Management attempts to obtain competitive rates for such services by
negotiating multi-year contracts at fixed prices. These contracts are generally scheduled to expire in one to five
years, unless renewed, and certain of them may be terminated by either party before their expiry upon prior
notice. Ryanair will need to enter into similar agreements in any new markets it may enter. See ―Item 3. Key
Information—Risk Factors—Risks Related to the Company—The Company Is Dependent on External Service
Providers.‖
During 2009, Ryanair introduced Internet check-in for all passengers and also introduced kiosks at
certain airports for the provision of other services. The Company has these kiosks in operation at Dublin,
London (Stansted), London (Gatwick), Frankfurt (Hahn), and many of its other bases. The introduction of
Internet check-in and kiosks combined with the reduction in the number of bags carried by passengers are
expected to enable Ryanair to achieve further reductions in airport handling costs.
Airport Charges
As with other airlines, Ryanair must pay airport charges each time it lands and accesses facilities at the
airports it serves. Depending on the policy of the individual airport, such charges can include landing fees,
passenger loading fees, security fees and parking fees. Ryanair attempts to negotiate discounted fees by
delivering annual increases in passenger traffic, and opts, when practicable, for less expensive facilities, such as
less convenient gates and the use of outdoor boarding stairs rather than more expensive jetways. Nevertheless,
there can be no assurance that the airports Ryanair uses will not impose higher airport charges in the future and
that any such increases would not adversely affect the Company‘s operations.
As a result of rising airport charges and the introduction of an Air Travel Tax of €10 on passengers
departing from Irish airports on routes longer than 300 kilometers from Dublin Airport (€2 on shorter routes),
Ryanair reduced its fleet at Dublin airport to 13 during winter 2010 (down from 22 in summer 2008 and 20 in
winter 2008). The introduction of the aforementioned €10 tax has likely had a negative impact on the number of
passengers traveling to and from Ireland. The Dublin Airport Authority (―DAA‖) has reported that passenger
volumes declined by 25% from 30 million in 2007 to 22 million in 2011. Ryanair believes that this is partly
reflective of the negative impact of the tax on Irish travel. Ryanair has called for the elimination of the tax to
stimulate tourism during the recession. The Company has cited the example of the Dutch government, which
withdrew its travel tax with effect from July 1, 2009. The Dutch travel tax had ranged from €11 for short-haul
flights to €45 for long-haul flights and had resulted in a significant decline in passenger volumes at Schiphol
Airport, Holland‘s main airport, according to data published by the airport. Ryanair also complained to the
European Commission about the unlawful differentiation in the level of the Irish Air Travel tax between routes
within the EU. From April 2011 a single rate (€3) of the Air Travel Tax has been introduced on all routes. In
May 2011 the Irish Government announced that it would abolish the Air Travel Tax, although no details were
provided as to when this decision would be implemented. No assurance can be given that the tax will be
abolished or indeed that a higher rate of tax will not be applied in the future, which could have a negative impact
on demand for air travel. In June 2011, Ryanair proposed to the Irish Government that it would deliver an