Agrees to repay EUR4m pending
Ryanair Holdings PLC
28 October 2004
RYANAIR AGREES TO REPAY €4M PENDING COURT APPEAL
OF EU's UNLAWFUL CHARLEROI DECISION
Ryanair, Europe's No.1 low fares airline, today (Thursday, 28th October 2004)
confirmed it had written to the Walloon authorities and agreed to repay €4M in
an escrow account until Ryanair's appeal is heard and the European Courts make a
definitive decision on this matter. If Ryanair is successful in its appeal,
these funds along with interest will be returned to Ryanair. If the appeal
fails, these funds will be transferred to the Region.
In a detailed written response to the Walloon region, Ryanair confirmed:
1. Ryanair's costs of establishing and operating its base at Charleroi at €40M
vastly exceeded any discounts received from the Walloon region, and the
European Commission's decision entitles Ryanair to net our costs off against
those of the Region. There is therefore no requirementfor any repayment.
2. The Commission's request for details on a 'route by route basis' confirms
the Commissions total lack of understanding of the costs and risks involved
in establishing a base of operations at completely unknown and unused
airport - basing 3 aircraft and simultaneously launching 6 new routes. These
enormous costs cannot be identified on a 'route by route basis'.
3. The Commission's conclusion that 'no private operator in the same
circumstances as BSCA would have granted the same advantages (to Ryanair) is
factually untrue and legally untenable. Ryanair has previously offered
evidence to the Commission confirming Ryanair receives lower costs at many
competing private airports and that Charleroi is one of Ryanair's more
expensive base deals. The Commission has totally ignored this factual
evidence.
4. The effect of the Commission's flawed decision to impose full costs on
Ryanair at Charleroi from 2001 onwards now makes Charleroi considerably more
expensive than other competing privately owned bases at the time and is a
complete distortion of competition when huge discounts and incentives are
being offered by both public and private airports throughout Europe to
airlines (not just Ryanair) in exchange for delivering new routes and
enormous traffic growth.
5. We have appealed the Commission's flawed decision to the European Court of
the First Instance and we are confident this decision will be overturned, as
this decision perverts fair and open competition, is highly damaging to the
competitiveness of public regional and secondary airports, and will force
consumers to pay higher fares at Charleroi in order to protect the high cost
Zaventem airport
6. We have been advised that it is unlikely that any national court would
enforce an application by the Walloon region to force Ryanair to pay any
amount claimed until the Court of First Instance has considered Ryanair's
appeal.
7. However Ryanair recognises that it is not the Walloon region that is pushing
this issue and we have no desire to place the Region in a difficult position
because of a legally flawed decision by the Commission. Therefore Ryanair
has agreed, under protest and without prejudice to the outcome of the
appeal, to place the requested €4M funds in an agreed interest bearing
escrow account until the European Courts make a definitive decision on this
matter.
8. When Ryanair is successful in its appeal, the Region will agree that these
funds along with interest will be returned to Ryanair. If the appeal fails,
Ryanair will agree that these funds will be transferred in their entirety to
the Region.
Ryanair's head of Communications, Paul Fitzsimmons said:
'Ryanair is confident that the unlawful decision of the European
Commission will be overturned by the European Court and that the Court
will promote the enormously successful partnership between low fares
airlines and regional airports, which has enabled millions of ordinary
consumers to fly at Europe's lowest fares and encourage the development
of unused, empty secondary and regional airports at Brussels Charleroi
and throughout Europe'.
Ends. Thursday, 28th October 2004
For further information:
Paul Fitzsimmons - Ryanair Pauline McAlester - Murray Consultants
Tel: 00 353 1 812 1228 Tel: 00 353 1 4980 300
This information is provided by RNS
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