AFP PARIS - Faced with the prospect of being forced out of a second regional airport in
Europe, the low-cost airline Ryanair warned Sept. 8 that the future of cheap
air travel remains in jeopardy if the European Commission decides the
company is benefiting from illegal subsidies.
With the Commission due to rule in the coming weeks on Ryanair's financial
arrangements at Charleroi airport, located south of Brussels, company chief
executive Michael O'Leary said a repetition of its setback over Strasbourg
would have a disastrous effect on customer choice.
The Dublin-based operator is to suspend flights from the eastern French city
to London's Stansted airport from Sept. 24 after a local court found for its
competitor Air France in a dispute over regional government aid.
The Strasbourg airport is operated by a quasi-statutory chamber of commerce.
In Brussels, the EU's competition commissioner Loyola de Palacio has been
conducting an investigation into whether Ryanair's contract with Charleroi
airport -- which is indirectly owned by the Belgian region of Wallonia --
constitutes a similar case of misuse of state subsidies.
"In Charleroi, Ryanair faces its Waterloo," said O'Leary in an opinion
column in the Wall Street Journal Europe newspaper.
"The opponents of competition ... wish to return Europe to the bad old days
when airfares were high and only rich people could afford to fly. That is
not the future -- it is the Dark Ages," O'Leary said.
Ryanair has transformed flying options in Europe by slashing costs and
developing new destinations away from established airline hubs. This year it
expects to carry more than 23 million passengers on over 130 routes -- at an
average cost, it says, of $42.
However its opponents accuse it of using its pre-eminent position in the
no-frills market to force though low-cost contracts with regional airports,
which can only afford them thanks to subsidies from state and regional
governments.
O'Leary warned that if the Commission decided against Ryanair it would mean
that low-fare air travel would be confined to privately-owned airports
across Europe, which are not subject to Brussels rules, leading to
considerable damage to regional development.
"The regional and secondary airports -- including those owned or part-owned
by public bodies -- must be allowed by the EU to compete with privately
owned airports to win the extraordinary growth in traffic, tourism and jobs
that Ryanair and other low-cost airlines bring," he said.
On Sept. 4 O'Leary presented documents to the commission, which he said
proved that the arrangements with Charleroi did not amount to a subsidy. He
promised to appeal if the ruling goes against the company.
In Strasbourg O'Leary said the Ryanair route "created over 200 jobs,
delivered 150,000 visitors for Alsace tourism and saved the only direct air
service between London and Strasbourg.
"The result of the court's recent mistaken decision in Strasbourg was that
the city and the Alsace region will now lose its only daily direct flights
to London," he said.
Air France's subsidiary Brit Air suspended its Strasbourg to London flights
in May complaining of market-distorting ticketing policies conducted by
Ryanair thanks to the airline's low-cost deal with the regional authorities.
