ANALYSIS:The crux of the row between Michael O'Leary and Mary Coughlan is Ryanair's determination to operate maintenance at Dublin airport independent of the airport authority, writes BARRY O'HALLORAN
RYANAIR IS currently in talks with two European airports that it says are keen to convince the airline to open a maintenance facility on their turf. The facility will create 300 jobs – jobs which Ryanair chief executive Michael O’Leary says could still go to Dublin, and the only thing preventing that is political action. Yesterday, he wrote to Tánaiste and Minister for Enterprise, Trade and Employment Mary Coughlan seeking to meet today to discuss this.
He wants her to instruct the Dublin Airport Authority (DAA) to sell a hangar to Ryanair, or to get IDA Ireland to take over the hangar and lease it to the airline, which will then use it as a maintenance base, creating 300 jobs.
The hangar in question is Hangar Six at Dublin airport, which Aer Lingus, Ryanair’s main competitor in the Irish market, now occupies. It had taken it over from aviation maintenance specialist SR Technics (SRT), which pulled out of the Republic last year with the loss of 1,100 jobs, 800 of them filled by well-qualified engineers.
Originally, O’Leary wrote to Coughlan offering to employ 500 of these staff, if she would intervene with either the DAA or the IDA and procure the hangar. This did not happen, or at least, not in the way that Ryanair sought.
Last week, the airline announced that it plans to build a hangar on a six-acre site at Prestwick Airport, near Glasgow, where it will employ 200 people. It is still in the market for suitable sites for the other 300, although O’Leary told The Irish Times yesterday that Ryanair is close to doing a deal.
It followed up the announcement in Scotland at the weekend by releasing details of the correspondence between the Tánaiste and O’Leary, and issuing a statement accusing the Government of protecting the “DAA’s monopoly” at the cost of Irish jobs.
The crux of the row is the antipathy between Ryanair and the DAA. O’Leary said yesterday that it did not want to deal with the DAA, because “once we’re in there for 18 months and they have us by the short and curlies, they’ll increase the rent”.
He points out that the authority is seeking to increase the rent for facilities used by Ryanair’s baggage handling staff by 100 per cent, while he says that passenger charges are going up by a further 40 per cent this year. Thus, the airline wants to either buy the hangar outright or lease it from the IDA.
Coughlan has already pointed out that her office has done what it could, through both the DAA and the IDA. Yesterday, she went a step further by releasing a letter she has written to O’Leary pointing out that the DAA was willing to build a hangar if necessary.
The DAA itself backed this up yesterday with a statement pointing out that it has told Ryanair directly and indirectly that it could “either replicate the facilities available in Hangar Six in a new build elsewhere on the Dublin Airport campus, or accommodate Ryanair in other hangars that were previously occupied by SRT”.
The airport authority says it always was, and would still be, happy to deal directly with Ryanair, adding that it has “several suitable locations for potential maintenance facilities at Dublin Airport”. However, O’Leary says that this would simply result in the same thing – Ryanair renting a hangar from the DAA, which it does not want to do.
Both the authority and the Tánaiste have also pointed out that Hangar Six is occupied. The DAA has leased it on commercial terms to Aer Lingus.
O’Leary dismisses this. Yesterday, he said the only maintenance carried out by his competitor at Dublin airport is routine line maintenance – the work done each time an aircraft lands and is prepared for take-off again – which does not require a facility on the scale of Hangar Six (which is 24,800 sq m).
He argues that this is a smokescreen for the DAA. “Aer Lingus does all its heavy maintenance in France; it’s not creating one new job,” he said yesterday. Conversely, he says that Ryanair needs to fully overhaul seven to 10 craft every week, work that requires large numbers of skilled engineers and technicians.
Nevertheless, this does not need to be done in Hangar Six – a purpose-built facility would surely do. Some observers say the real question to be asked is why is he focusing on the hangar that is occupied – for good or for ill – by Ryanair’s main competitor in the Irish market, particularly when there are other alternatives?
The other question that has been asked is whether this a smokescreen of O’Leary’s own making. Does he want the hangar with the object of ultimately building his own terminal there? The Ryanair chief executive replied yesterday that he would be happy with a lease, or even a sale, on terms preventing the company from doing this.
All this would have to be thrashed out if Coughlan were to meet him today, or at some other point. One thing she’ll have to establish early on in the discussion is whether there is a real chance at this stage to redirect 300 jobs back to Dublin from some other destination.
Barry O'Halloran is an Irish Timesbusiness reporter