THE failure of Ryanair to meet the terms of a five year contract with Shannon Airport has resulted in a legal settlement of €3.5 million.
The budget airline reached an agreement with the airport for a discount on passenger charges in late 2004, provided that target numbers were met between May 2005 and April 2010.
In the deal, Ryanair paid between €1 and €2 per person, instead of the airports standard €4 charge per departing passenger, in exchange for achieving a target of two million customers by April 2010.
A clause in the contract required Ryanair to pay compensation to the Dublin Airport Authority, Shannon’s management body, for any shortfall in passengers, if they did not meet the objectives of the deal
However, the Limerick Post has learned that Ryanair achieved targets for the first three years of the agreement, but not for the final two.
The airport is said to have sought €5 million in damages from the airline, but came to an out-of-court settlement of €3.5 million, with Ryanair also paying the airport authority’s legal costs of several hundred thousand euro.
Ryanair sought to invoke a force majeur clause included in the contract by claiming that the €10 travel tax introduced by the Government in March 2009 rendered it impossible to reach the goal and discounted the agreement.
The claim was rejected by Shannon Airport, legal proceedings were initiated and the settlement reached in January.
Ryanair began reducing its Shannon based aircraft in February 2009 and axed 16 routes in March 2010. It continues to operate to 11 destinations, mostly in Spain and UK.
Speaking about the settlement an airport spokesperson told the Limerick Post: “The airport confirms that the settlement has been reached but is making no further comment”.
