Ryanair warns of price rises after EC ruling By Jon Myles
BOSSES at Ryanair have warned they will be forced to raise prices if the airline is ordered to abandon special deals with regional airports.
The warning came after the European Commission ruled the low-cost carrier’s cut-price arrangement with State-owned Charleroi airport south of Brussels amounted to an illegal subsidy using taxpayers’ money.
It ordered Ryanair to pay back £3million it had received from the airport.
The decision is likely to have wide ramifications and could affect similar deals Ryanair and other low-cost operators have struck with government-owned airports throughout Europe — including Cork and Shannon.
Some 20 per cent of Ryanair’s passengers fly into state-owned airports, and airline chief Michael O’Leary warned the decision could be devastating for the whole low-cost air transport industry.
He said: “We are the good guys in this. The commission’s bizarre ruling is nothing but meaningless interference.”
The commission estimates that the loss of the subsidy will add around £5 to the cost of a return flight from Charleroi.
But Mr O’Leary said: “If a politician estimates £5 it could be twice that.”
Despite the ruling, the EC allowed the vast majority of Ryanair’s Charleroi deal to stand, worth an estimated E30million. It only questioned about E15million of the deal, covering landing charges and passenger fees and said about 30 per cent of that should be repaid.
Mr O’Leary said paying back the money was no problem for Ryanair but claimed the ruling was anti-competitive and against the interest of consumers.
Ireland’s Transport Minister Séamus Brennan said that the decision would have no bearing for Cork or Shannon or any of the other regional airports in Ireland.
“I think that there were silver linings in the decision for the country,” he said.
“The decision was a softer decision than we expected. I believed the commission would lay very strong guidelines with regard to state aid to airlines.
“But it confined its decision to just one airport and one airline.”
Four commissioners disagreed with the ruling, including Ireland’s Consumer Affairs Commissioner David Byrne and Britain’s Neil Kinnock. The Commissioner for Competition Mario Monti and for the Internal Market Frits Bolkestein said it could have a distorting effect on the airline industry.
But other low-cost airlines dismissed Ryanair’s warning over increased fares and said the ruling would make little difference.
EasyJet and Virgin Express both welcomed the commission decision and said their fare structure would remain unchanged.
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