Ryanair sues EU over French aid

Ryanair knocked on the gates of the European Court of First Instance with a legal case against the European Commission, accusing it of not preventing alleged illegal French state aid for Air France.

“Ryanair... today (Thursday, November 8, 2007), (exactly 18 months after its original complaint), lodged a case in the European Court of First Instance against the European Commission’s failure to act on Ryanair’s complaint about one billion Euro worth of State to Air France in the form of unlawful reduced domestic airport charges in France,” Ryanair said in a statement.

Confirming the legal action, Michele Cercone, spokesperson for the European Commissioner for transport, Jacques Barrot told New Europe, “The Commission is aware that Ryanair has launched an action under Article 232 for failure to act in connection will an allegation of state aid to Air France.” Ryanair added, “... (Ryanair) has called on the Commission several times to investigate this obvious abuse of EU competition rules, but the Commission has repeatedly failed to do so.”

Commenting on the subject, Cercone said, “The complaint is that by means of a differentiated system of airport charging in France where lower charges are imposed on operators flying routes inside France that the French authorities have favoured Air France.”

“While the Commission has not yet seen the content of the case lodged by Ryanair, it is confident that this action for failure to act will not be upheld. Ryanair’s complaint dates from May 8, 2006 (there was a supplementary submission on May 30, 2006).

“On receipt of the complaint the Commission services have taken action and have written to the French authorities to request information and clarifications on June 21, 2006, January 30, 2007, April 27, 2007 and June 28, 2007. Replies have been received on August 24, 2006, May 11, 2007 and August 29, 2007 and are being examined,” explained commission spokesman.

Announcing the launch of the latest proceedings Michael O’Leary, Ryanair’s CEO, said in a statement: “This is just another example of the Commission’s unevenhanded application of the State aid rules. They apply one rule to flag carriers by ignoring blatant State aid to Air France, Alitalia, Olympic, Lufthansa among others, while at the same time wasting time and money investigating baseless complaints from flag carrier airlines against open market commercial deals at regional and secondary airports.

“The French Government’s operation of massively discounted domestic airport fees in France – almost all of which supports Air France – amounts to approximately one billion Euro of illegal State aid to the benefit of Air France, yet the Commission has refused to do anything about this for the last 18 months! The Commission has previously outlawed differentiated domestic/intra EU airport charges in Finland, Portugal, the UK and Ireland, so why should France be any different?” asked Ryanair’s CEO.

Getting into the technicality of the subject, Cercone, the European Commission spokesman said, “In this connection it is the intention of the Commission services to examine this complaint both under the combined provisions of Article 49 of the Treaty and Article 3(1) of Council Regulation (EEC) No 2408/92 and under the State aid rules. To this end the Commission has on October 23, 2007 issued a letter of formal notice under Article 226 to France concerning discriminatory charges levied at French airports. “The Commission is also examining any possible advantage given in the context of State aid investigation into airport charging systems in airports in France and inquiries in relation to one such airport are already at an advanced stage,” Cercone added.

The Ryanair CEO in his statement called for fair competition saying, “It appears that the Commission applies different rules for the high fare flag carrier airlines compared to low fares airlines. We are calling on the Commission to start promoting competition and stop protecting flag carrier airlines who continue to receive unlawful State aid.”

Dublin-based Ryanair is currently involved in a number of separate legal challenges. It is challenging a European Commission decision to block its bid for fellow Irish airline Aer Lingus, and is fighting planned flight cuts at Rome’s Ciampino airport. Ryanair is also challenging the French government’s demand that the airline applies French working practices for its staff working in France.