Ryanair, the low cost, big number European airline headquartered out of Dublin, Ireland, has announced that it will close its Oslo Rygge base in southern Norway as of October 2016.
The decision was made after the Norwegian Government confirmed an NOK80 ($9.61) Air Transportation Tax, plus Norwegian VAT, on departing domestic and international passengers. As a result of the new tax and subsequent closure, the airline will cancel 16 routes from Oslo Rygge (Beziers, Brussels, Chania, Dublin, Edinburgh, Malaga, Palma, Poznan, Pula, Riga, Rzeszow, Thessaloniki, Szczecin, Tallinn, Wroclaw, and Zadar) and move 4 aircraft & Ryanair jobs out of Norway to other Ryanair bases. The combined moves will reduce the airline’s Norwegian traffic by 50% (approximately 900,000 passengers).
The new departure tax will, according to Ryanair, have a devastating impact on Norwegian air travel and tourism. The airline had previously urged the Norwegian Government to ditch the per seat per flight tax. The Norwegian government, however, hopes to raise approximately NOK1 billion ($119,965,220 U.S.) from the new tax in 2016.
The International Air Transport Association (IATA), the trade association for the world’s airlines, representing some 260 airlines or 83% of total air traffic, opposes the tax. In December of 2015, IATA sent a letter detailing its concerns about the consequences of the tax, including reductions in travel and service, to Siv Jensen, Norwegian Minister of Finance. You can read the letter here (downloads as a pdf). Nonetheless, Norway pressed on with the tax.
Ryanair’s Chief Commercial Officer, David O’Brien said about the move, “The illogical decision of the Norwegian Government to introduce a flat rate environmentally unfriendly tax unfairly penalises passengers on efficient, green, airlines such as Ryanair in favour of passengers on high fare, half empty, gas-guzzling airlines, and destroys the cost competitiveness of privately owned Oslo Rygge Airport in favour of the state-owned Avinor monopoly. As a result, Ryanair has no choice but to close its Oslo Rygge base which will result in our Norwegian traffic being cut in half.”
O’Brien called the announcement a “black day for Oslo Rygge, for Norway, and for Norwegian tourism.” O’Brien said, “This tax will severely damage Norwegian tourism, particularly around regional airports. The Norwegian Government has instantly made Norway uncompetitive and less attractive to airlines and tourists.”
The airline isn’t saying the closure is a completely done deal, with O’Brien remarking, “It’s all about the tax. Cut the tax this week and we’ll reverse the plan.”
