DUBLIN, Feb 5 (Reuters) - Ryanair (RYA.I), Europe’s largest low-cost airline, will cut the number of routes served from its Shannon hub in the west of Ireland, with the loss of about 800 jobs in the area, it said on Thursday.
Ryanair (RYA.L) is quickly expanding its European network to take advantage of consumers trading down from full-service carriers in a recession, but bookings at Shannon plunged after Ireland levied a new 10 euro ($13) departure tax, it said.
Anxious to fill the resulting multi-billion euro hole in public finances from a deepening recession, the government has raised taxes -- including the new airport tax -- cut spending and this week unveiled 2 billion euros of additional tightening.
Ryanair said the 10 euro levy was higher than the base fare some of its passengers were paying at Shannon and pointed to Britain and the Netherlands where similar taxes had hit traffic in the past, it said.
“This government’s decision to impose a travel tax of more than 100 percent on these price-sensitive visitors is insane and simply ‘tourism suicide’,” Chief Executive Michael O‘Leary said in a statement.
Trimming the Shannon base will result in more than 100 jobs being transferred to other Ryanair bases and the loss of about 700 additional support jobs in the area, it said.
Figures on Wednesday showed Irish jobless claims hit a record high in January, with Ryanair’s move to cut routes and redeploy two of six aircraft based at Shannon in the summer hitting one of Ireland’s most economically vulnerable regions.[ID:nL4760070]
Dell DELL.O, the world’s No. 2 PC maker, in January moved production from nearby Limerick to Poland, with a loss of 1,900 jobs at Ireland’s largest exporter. [ID:nL8194280]
Though Ryanair does not have a transatlantic service, for other airlines Shannon also serves as an important gateway to American destinations.
Reporting by Andras Gergely; Editing by Rupert Winchester