Press Releases

Derry City Council publishes Airline Agreement

Friday 22nd December 2006

Derry City Council has today published the agreement it held with Ryanair in 1999 for the London Stansted route explaining that at the time of commencement it represented the best deal for the North West.

In 1999 low-cost travel was emerging as a strong competitive option for regional airports. Along with improving access to regions, the low-cost option provided an opportunity to develop business and leisure traffic to the North West. Since July 1999, over 1,000,0000 passengers have travelled on the Ryanair service making it the most successful of the airport’s routes and representing a significant investment bonus for the region.

Since the publication of new EU Guidelines in 2005, the agreement with Ryanair for the London Stansted route ended and members of Derry City Council considered the commercial risk of releasing the information to be significantly reduced.

A spokesperson explained: “This was a commercial arrangement between a private airline and a public airport. If the information had been released at the date of the request in January 2005, the information would have had a significant adverse impact on the commercial interests of the airport and that of the local economy. It would have been of significant interest to competitor airports and airlines.

“The Information Tribunal agreed with Derry City Council in recognising that under the Freedom of Information Act, the statutory exemptions of adverse impact on the commercial risks of the Council and the Airport and adverse impacts on the local economy that permitted non-disclosure of the information, were properly considered and applied by the Council. The agreement with Ryanair for the London Stansted route has ended and it is this change that has reduced the commercial risk associated with the release of information”.

The additional information provided through the Freedom of Information request includes details of “Airport Charges”, “Ground Handling Charges”, “Operational Matters” and “Marketing Support”. The spokesperson continued:

“Legal advice, including that of senior counsel and an independent business appraisal of the arrangement with Ryanair concluded that, “on a commercial basis, a private investor would have reasonably entered into such an arrangement at that time”.

“Derry City Council is committed to ensuring public investment in a public asset is protected against the competition of other private sector airports. The Council remains confident that it acted properly in the public interest in withholding this information while the commercial agreement was in place”.

The Information Tribunal disagreed with Derry City Council on where the balance of the public interest applied. This was a very fine balance and the decision could easily have gone the other way. The Council continues to believe that the decision of the Tribunal was flawed in law on at least three points but, on balance, taking all matters into account had decided to release the information in any event.

Notes to Editor:

The 1999 Agreement between City of Derry Airport and Ryanair

The Agreement was for a ten-year period from 01st July 999 until 30 June 2009 and covered four areas:

Airport Charges : The agreement at that time rebated airport charges for a period of ten years to zero. Airport charges are the charges levied by airports on airlines to cover areas such as landing and navigation fees, security charge and airport tax.

The current normal full Airport Charge is £3 per departing passenger, applicable to this size of route. The amount was reduced to zero for a period of ten years.

Ground Handling Charges: The agreement was for £100 per departing aircraft. This amount had not been reduced and was charged at the published rate and is dependent on the size of the aircraft.

A ground handling charge is levied on an airline for check-in and baggage handling and can be carried out by an airline or a specialist ground handling company. City of Derry Airport provided the ground handling service.

The current normal ground handling charge for this type of aircraft is £1 per departing passenger.

Operational Issues : The following operational restrictions were placed until works being carried out at the airport during 1999/2000 were completed. It was agreed that if any aircraft that had to be diverted while the easterly runway was in use, City of Derry Airport were required to pay the landing charges and coach transfer charges to the diverted airport.

The works were completed within the two-year time period and during that period no diversions took place that incurred any charges.

Marketing Support: An amount of £250,000 per annum for a period of five years from the 1st July 1999 to 30 June 2005 would be paid to Ryanair for joint marketing activities. Derry City Council made an annual provision of £60,000 towards this marketing expenditure.

To meet this marketing commitment for the region, a consortium was established with membership from Donegal County Council, Northern Ireland Tourist Board, Failte Ireland and Derry City Council. The marketing investment was against an audited marketing programme aimed at promotion of the region and route in the London market to encourage inbound passengers from this area into the Region.

Expenditure for this marketing programme was independently audited to comply with public spending requirements of the membership.

Ends

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