Ryanair has scaled back its services from Cork to Liverpool and switched them to Kerry Airport in a row over passenger charges, writes Barry Roche, Southern Correspondent

Ryanair blamed increased charges, which it said the Cork Airport Authority was imposing to meet the cost of a new €170 million-plus terminal building, for its decision to move the services to Kerry Airport.

Ryanair deputy chief executive Michael Cawley said that the decision to reduce the Cork-Liverpool service from seven to four flights a week was a direct result of the Cork authority's decision to introduce 38 different price increases at the airport.

Mr Cawley denied that Ryanair was "playing hardball" with Cork Airport, but said Ryanair could only continue to grow its business at the airport if charges were brought into line with charges elsewhere.

According to Mr Cawley, Ryanair's average cost for bringing passengers into airports across Europe is €6.15, whereas the cost of landing a passenger at Cork including a €3 euro baggage handling charge is €18.89, and Ryanair cannot grow its business into Cork on these figures.

"We're reducing our services from Liverpool to four weekly flights from a daily service because of the 38 prices that Cork Airport has recently announced, including most particularly the increase in the rental of ticket desks and check-in desks," said Mr Cawley.

He said that the company had no plans to cut any of its Dublin, Stansted or Gatwick routes out of Cork but it would be reviewing the situation and there certainly would be no new Ryanair routes coming to Cork until the price regime is changed.

Mr Cawley said that Ryanair had estimated that it would bring some 900,000 passengers into Cork this year, but with the loss of the three Liverpool flights to Kerry this would not now be achieved and both the airport and the Cork region would suffer as a consequence.

Cork Airport was gaining €30,000 from increased rental charges from Ryanair but was losing €310,000 in passenger charges because of reduced numbers, while the estimated cost to the economy in lost revenue was €12 million and some 40 tourist- related jobs, he said.

Mr Cawley said that he had sympathy with Cork Airport as it was saddled with a debt of over €170 million for a new terminal which could have been built much more cheaply, as was the case in Germany where two similar-sized airport terminals were built for €13 million and €15 million.

"I think Cork Airport are the victims here. The prices are a symptom of the problem and the problem is the debt.

"They can't service it off the business base they have, it's impossible for them to manage the airport with the existing debt.

"The maximum debt they should have is €15 million," he said.

Mr Cawley said the solution was for the Dublin Airport Authority, which took over the assets and liabilities of Aer Rianta, to sell off its stake in both Birmingham and Dusseldorf airports and the Great Southern Hotel chain, which would more than cover the liabilities of Cork, Dublin and Shannon airports.

Cork Airport chief executive, Pat Keohane expressed disappointment at the Ryanair decision to reduce its Liverpool services but pointed out that the proposed new charges at Cork Airport will not come into effect until September 1st.

"The financial impact of the increase is approximately one cent on each Ryanair passenger going through Cork Airport in 2006.

"Ryanair will obviously make the decisions most expedient for themselves, but Cork Airport has a duty to operate on a sound economic basis," he concluded.