Post by Kim on Sept 20, 2003 19:18:12 GMT -5
Dismay as Ryanair loses route case
Andrew Clark
Friday September 19, 2003
The Guardian
Ryanair expressed "total dismay" yesterday after suffering another French courtroom defeat in a battle over alleged unfair subsidies from airports, which
threatens its routes to popular second-home destinations.
An appeal court in Nancy refused to stay an earlier order that Ryanair cease its relationship with the publicly funded owners of Strasbourg airport.
The decision ended any short-term prospect of saving Ryanair's service from Stansted to Strasbourg, which will stop next Sunday.
The Irish low-cost airline's shares dropped by 12p to 447.5p on the ruling, which was a significant setback in a dispute that could threaten up to 19 of its routes to publicly owned continental airports.
Jim Callaghan, Ryanair's head of regulatory affairs, said the Strasbourg route would be suspended pending a full appeal to the French courts, which could take over a year.
"In the meantime, French consumers and UK visitors to the Alsace will suffer," he said. "Strasbourg airport will continue to decline, with the loss of 200,000 passengers delivered by Ryanair."
Ryanair's low-cost business model is predicated on securing advantageous deals from little-used airports. Many airport authorities offer incentives to the airline to attract its flights, in the hope that visitors will spend money.
The European commission is investigating whether one such deal, at Brussels' Char-leroi airport, is illegal. Many of the airports are publicly owned, which could mean payments to Ryanair constitute illegal state aid.
Ryanair's defeat in Strasbourg followed a complaint by an Air France subsidiary, Brit Air, which objected to the airport's offer of €1.4m (£970,000) incentives. Brit Air claimed it was unable to get similar terms. It subsequently scrapped its service between London and Strasbourg.
Mr Callaghan yesterday claimed customers had benefited despite Brit Air's withdrawal. He said Ryanair carried 18,000 passengers a month on its Strasbourg route, compared with 3,000 a month previously conveyed by Brit Air.
Ryanair faces a series of disputes. French rival Air Mediterranée has complained that the Irish airline is getting €700,000 of aid to fly to Pau, on the edge of the Pyrénées.
The commission's verdict on Ryanair's Charleroi deal is expected to determine the fate of many other routes to publicly owned airports in France and Belgium. The decision is due next month.
In Britain, the Air Transport Users' Council has expressed regret about the disputes, saying Ryanair's flights have provided a cost-effective service to passengers. Some travellers have complained that they have bought second homes in France in the expectation that they would benefit from the airline's cheap fares.
Andrew Clark
Friday September 19, 2003
The Guardian
Ryanair expressed "total dismay" yesterday after suffering another French courtroom defeat in a battle over alleged unfair subsidies from airports, which
threatens its routes to popular second-home destinations.
An appeal court in Nancy refused to stay an earlier order that Ryanair cease its relationship with the publicly funded owners of Strasbourg airport.
The decision ended any short-term prospect of saving Ryanair's service from Stansted to Strasbourg, which will stop next Sunday.
The Irish low-cost airline's shares dropped by 12p to 447.5p on the ruling, which was a significant setback in a dispute that could threaten up to 19 of its routes to publicly owned continental airports.
Jim Callaghan, Ryanair's head of regulatory affairs, said the Strasbourg route would be suspended pending a full appeal to the French courts, which could take over a year.
"In the meantime, French consumers and UK visitors to the Alsace will suffer," he said. "Strasbourg airport will continue to decline, with the loss of 200,000 passengers delivered by Ryanair."
Ryanair's low-cost business model is predicated on securing advantageous deals from little-used airports. Many airport authorities offer incentives to the airline to attract its flights, in the hope that visitors will spend money.
The European commission is investigating whether one such deal, at Brussels' Char-leroi airport, is illegal. Many of the airports are publicly owned, which could mean payments to Ryanair constitute illegal state aid.
Ryanair's defeat in Strasbourg followed a complaint by an Air France subsidiary, Brit Air, which objected to the airport's offer of €1.4m (£970,000) incentives. Brit Air claimed it was unable to get similar terms. It subsequently scrapped its service between London and Strasbourg.
Mr Callaghan yesterday claimed customers had benefited despite Brit Air's withdrawal. He said Ryanair carried 18,000 passengers a month on its Strasbourg route, compared with 3,000 a month previously conveyed by Brit Air.
Ryanair faces a series of disputes. French rival Air Mediterranée has complained that the Irish airline is getting €700,000 of aid to fly to Pau, on the edge of the Pyrénées.
The commission's verdict on Ryanair's Charleroi deal is expected to determine the fate of many other routes to publicly owned airports in France and Belgium. The decision is due next month.
In Britain, the Air Transport Users' Council has expressed regret about the disputes, saying Ryanair's flights have provided a cost-effective service to passengers. Some travellers have complained that they have bought second homes in France in the expectation that they would benefit from the airline's cheap fares.