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Airline boss says subsidies should be scrapped

Ryanair boss Michael O'Leary wants the Government to scrap airline subsidies worth millions of euro -- despite his own airline getting €3m every year from the Department of Transport.

Mr O'Leary backed An Bord Snip's recommendation last night to axe the €15m paid every year to airlines operating regional routes under Public Service Obligation (PSO) contracts.

But Mr O'Leary's own airline successfully tendered for one of these contracts, which they said is used to "subsidise air tickets of rich people travelling on tiny routes between the regional airports and Dublin".

Ryanair currently operates the Kerry-Dublin route and will be paid a total of €9m in Government subsidies up to 2011.

Rival airline Aer Arann won the remaining three PSO contracts, valued at €12m every year, but does not want the PSO subsidies scrapped.

A Ryanair spokesman said last night that it applied for the subsidy while at the same time calling for its abolition because "the grants are there and we would be stupid not to apply for them".

Despite claiming the subsidies, Ryanair said last night that it was opposed to Government grants for air services because "all they do is prop up loss-making airlines on uneconomic, under-used routes from the Irish regions to Dublin where more than 90pc of the traffic travels on motorways".

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