Ryanair Launch Appeal
Ryanair Holdings PLC
25 May 2004
RYANAIR LAUNCH APPEAL AGAINST COMMISSION'S FLAWED DECISION ON CHARLEROI
Ryanair, Europe's No. 1 low fares airline, today (25th May 2004) confirmed that
it had filed its appeal against the Commission's decision in the Charleroi case
to the European Court of First Instance requesting the Court to annul this
flawed decision. The Commission wrongly found that certain elements of Ryanair's
arrangements with Brussels Charleroi Airport were illegal state aid.
The Commission's decision completely ignored the fact that the agreement between
Ryanair and the airport arose after intense negotiations with several other
airports. Ryanair also confirmed that it has similar and in fact lowercosts at
private airports. Under the state aid rules, a public airport must be able to
compete on a level playing field with private airports and to offer the same
conditions. The Commission's decision in Charleroi ignored these lower cost
agreements and will prevent public airports from competing on a level playing
field for new routes and passenger growth and will lead to less low fares,
competition and choice for European consumers.
The Commission's investigation was initiated following an 'anonymous' complaint,
widely believed to by the monopoly main airport, Brussels Zaventem, in a bid to
limit competition from Brussels Charleroi, and has been backed up by such high
fares airlines as Air France and their high fares association the AEA.
Commenting today on its appeal to the European Courts, Ryanair's Chief
Executive, Michael O'Leary, said:
'It is unfortunate that after having successfully liberalised the market
for air transport, which ushered in an era of unprecedented competition
and low fares for consumers, the European Commission now appears to be
playing into the hands of the struggling, former monopoly national
airlines and monopoly hub airports, to protect them from competition.
Ryanair has pioneered the low fares model of offering direct
point-to-point low fare air services to and from underutilised regional
and secondary airports all over Europe. This has enabled us to offer
fares at a fraction of what the high fare, rip-off airlines have been
forcing on consumers for years. Ryanair's partnership with these
airports has been good for the airports, good for Ryanair and, most of
all, good for consumers.
Now that Ryanair has become a major competitive threat to the dinosaur
national airlines and monopoly airports, they have begun to misuse the
state aid rules and use other dirty tricks to prevent competition and
raise fares to consumers. It is a pity that the European Commission has
allowed itself to be used to prevent competition and to place at risk
the very successful partnership between low fares airlines and regional
airports.
The Commission's flawed decision in Charleroi has been heavily
criticised by the Forum of European Regional Airports (FARE), the
European Low Fares Airline Association (ELFAA), the Assembly of European
Regions (AER) and consumers - all concerned about the negative precedent
this decision creates for European regional airports and the regions
they serve.
We are therefore calling on the European Court to overturn this flawed
and anti-competitive decision on the following grounds:
•The Commission failed to apply the Market Economy Investor Principle
(MEIP), which is the test for proving that a public company was acting in
the same way as a private investor would have in the same circumstances.
•The Commission ignored factual evidence that the Charleroi agreement
resulted from negotiations with several other airports.
•The Commission ignored the fact that the deal was specifically offered to
other airlines willing to make the same investment in the airport that
Ryanair did.
•The Commission ignored the fact that Ryanair demonstrated that it had
lowercosts at several private airports.
•The Commission ignored the huge growth in passengers, profitability and
value of the airport as a result of Ryanair's investment in the airport
(roughly €200 million).
•The Commission ignored the fact that other airlines, commercial retailers
and airport investors are now approaching Brussels Charleroi Airport as a
result of Ryanair's successful operations at the airport.
The Commission's decision is therefore seriously flawed and creates a very
damaging precedent for underutilised regional airports all over Europe. High
Fares airlines like Air France and Alitalia are already using this flawed
decision to undermine competition elsewhere in Europe.
We are confident that this decision will be overturned by the European Court and
that the successful partnership between low fares airlines and regional airports
will be vindicated.'
ENDS. Tuesday 25th May 2004
For reference:
Pauline McAlester Paul Fitzsimmons
Murray Consultants Ryanair
Tel: +353 1 4980300 Tel: +353 1 8121212
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