[Article] Ryanair

Victor

I feel so sad that Michael O'Leary won't be able to bump someone from a flight NOT!

http://home.eircom.net/content/unison/national/1678642?view=Eircomnet

New passenger rights threaten low cost airlines
From:The Irish Independent
Thursday, 16th October, 2003
Conor Sweeney in Brussels

COMPENSATION is to be doubled for passengers "bumped off" aircraft under a new law which will also guarantee payouts for cancelled flights, including charter or budget airlines.

Maximum payments of €600 will be made to long-haul passengers whose flights are overbooked or cancelled, while short-haul travellers stand to gain €250 or €400, depending on their destination.

Although travellers will welcome the guaranteed rights, contained in a package hammered out in Brussels yesterday, it will hit low-cost airlines such as Ryanair and Aer Lingus.

The Irish Government is unhappy with the outcome of the complex regulations, which emerged after conciliation talks between the European Parliament and the Council of Ministers.

Irish officials in Brussels warned that Ireland would vote against the package, which they consider to be too heavily loaded against low-cost carriers.

Specific rules are laid down in the new agreement for two different areas: denied boarding - the notorious practice of overbooking flights and then denying seats to some passengers; and the conditions that apply where flights are delayed.

In the first scenario, which will mainly hit traditional carriers, airlines must offer €250 in compensation for passenger removed from flights of less than 1,500km; €400 for flights of 1,500 to 3,500km; and €600 for longer flights, such as trans-Atlantic crossings. Phone calls and meals must also be provided. The package was broadly welcomed in Brussels as a safeguard against the practice of overbooking, where some ticket-holders get "bumped off" planes.

Airlines must seek volunteers to give up seats on overbooked planes and offer alternative flights and accommodation for those who can't be offered a seat.

The Irish Government has objected to part of the package which obliges airlines to offer passengers accommodation if a cancelled flight involves an overnight wait.

The initial proposal suggested this would only apply in exceptional circumstances but this was deleted, placing a much broader responsibility to accommodate, though not compensate, passengers where the plane is delayed.

The Irish concern is that the cost of accommodating a planeload of passengers will be very high for low-cost airlines, especially when many of the tickets could have been sold at a far lower price than the expense of hotels.

They fear this could trigger higher ticket prices and stifle the sharp growth of Ryanair and other airlines.

However, the Association of European Airlines - which includes Aer Lingus - gave the deal a guarded welcome, describing it as a "workable compromise".

Victor

Ooooh, fares are going up by €0.45!!!! But elsewhere I'm sure I've heard him say taxes and charges were not part of fares, so fares aren't rising because of Aer Rianta

O'Leary blames Aer Rianta for rise in Ryanair fares
From:ireland.com
Thursday, 16th October, 2003

Ryanair chief executive Mr Michael O'Leary has said its air fares on routes from Dublin will rise by 9 per cent as passengers will be forced to pay the higher passenger charges to be imposed by Aer Rianta.

Speaking after a consultation meeting hosted by Aer Rianta for users of Dublin Airport yesterday, Mr O'Leary called on the Government to replace the aviation regulator and blamed the Taoiseach for stalling progress at the airport.

"We get what we expect from Aer Rianta. They fight their corner to protect a monopoly. What we are frustrated with is an inept Government. It's about time this prime minister started leading instead of moping around hoping that it will all work out in the end. He is ineffectual," Mr O'Leary said.

Aer Rianta began a consultation process on the increased charges that have now been approved. The airlines and other airport users must now make submissions to the airport authority and the process will conclude on November 11th. The new schedule of charges is due to be published in December and come into effect on January 1st 2004.

The Commission for Aviation Regulation has raised the maximum charge from €5.27 to €5.45 per passenger until September 2004. Aer Rianta has on average been collecting €5 per passenger and intends to collect the maximum €5.45 per passenger, yielding a 9 per cent increase.

Aer Rianta told the meeting that the higher charges will be used to meet rising security and operational costs and to fund essential investment at the airport. The average charges per passenger include landing and parking charges for aircraft on the runways and aprons, charges for the use of air-bridges to the terminal building and security.

It also told the users that the current package of route incentives and discount schemes made available to airlines will close at the end of this year. This comes into effect at a time when Aer Lingus has announced new European routes.

Mr O'Leary said Aer Rianta was being allowed to increase charges because it failed to deliver any growth in traffic last year. "Tourism is struggling, traffic numbers in the UK are down year to date and Ryanair fares will have to go up at a time when there should be lower charges."

He again stated that Ryanair would not open any new routes out of Dublin Airport until there was competition in the form of a second terminal. It is one of 13 parties that has lodged an expression of interest to develop it.

"We have a very good business all over Europe but we have an inept Government incapable of making any decisions. This charge will go directly onto the fare. If we had competing terminals the charges would come down. It's a joke. It's a shambles," Mr O'Leary said.

ur mentor

it might make him put on some backup planes-
only downside is he will probably charge more- he sre won't make less money!

John R

So the Irish government objected. I wonder how much that cost Mr. O'leary?

Victor

Originally posted by John R
So the Irish government objected. I wonder how much that cost Mr. O'leary?

€50,000 a year to the PDs.

John R

Maybe O'Leary should petition the EU for a backhander guarantee scheme.

embraer170

Ryanair doesn't overbook flights anyway.

sceptre

They do cancel flights though.

Bee

Originally posted by Victor
€50,000 a year to the PDs.

Yikes Victor! Are you losing the plot? You are saying they are bribed!!!

Other good posts here have been censored for less!

Oh! humbliest apologies!!!!

Obviously you mean "Party Political Donations".

Nod, Nod , Wink, Wink Say no more....

Bee

Victor

Originally posted by Bee
Obviously you mean "Party Political Donations".

Of course, what else? but the were true to their "no frills" policy last year and only gave €5,451.

Standards in Public Office Commission
http://www.sipo.gov.ie/27fa_246.htm#J

Previous year
http://www.sipo.gov.ie/268a_246.htm#H

€63,487. Cheque. Michael O'Leary. Individual. Gigginstown House, Mullingar, Co. Westmeath.

Victor

http://home.eircom.net/content/irelandcom/topstories/1736350?view=Eircomnet

O'Leary claims on Charleroi rebuffed by EC
From:ireland.com - (Additional reporting Guardian Service)
Friday, 24th October, 2003

The European Commission has dismissed Ryanair's claims about the likely outcome of its investigation into its deal at Belgium's Charleroi airport.

Mr Gilles Gantelet, spokesman for the Transport Commissioner Ms Loyola de Palacio, said Ryanair chief executive, Mr Michael O'Leary's claims that the length of the deal may be shorted to five years had no foundation.

"He does not have any idea of what the Commission is going to decide, mainly because the Commission does not have an idea of what it is going to decide. I think it's very dangerous for everyone to have these declarations and strange speculations," he said.

Mr O'Leary vented his spleen yesterday about the Commission's investigation and new legislation designed to confer greater rights for compensation on passengers. He told delegates attending a conference in Brussels that the Commission will change some details to appease other high-fare airlines. He also urged the Commission to expedite its decision on Charleroi, which may now be announced next month.

"The Commission's decision on Charleroi is crucial. It will be our Waterloo and we will win it," he declared. He made it clear that Ryanair would fight any negative ruling. "If it does... we'll be off to every European court in every hill and valley. We will never surrender."

Mr O'Leary said Ryanair would not be "shouldered with stupid legislation" coming out of Brussels that has no effect but to make air travel less competitive.

The Commission is examining whether Ryanair received unfair subsidies from the Walloon regional government when it established its Charleroi hub in 2000.

It also emerged yesterday that budget airline, Virgin Express, which competes with Ryanair in Belgium, has urged the Commission to restore fair competition in the Belgian airline industry. In an open letter to the Transport Commissioner, Virgin Express managing director Mr Neil Burrows said the subsidies paid to Ryanair flew in the face of fair competition. "We can only trust that you and your staff will uphold the principle of fair and free competition and ensure that those who have abused this principle are made to stop," the letter stated.

"Those responsible for providing subsidies to an airline that is clearly not in need of them are acting contrary to the interests of fair competition," he said. "It is imperative, in our view, that the EC takes the necessary prompt corrective action to restore balance to the Belgian aviation industry," he added.

When asked about the Virgin Express letter to the Commission, Mr O'Leary said he felt as though he had been savaged "by a dead sheep". He categorically denied that Ryanair received illegal subsidies from the Belgian public authorities, he lampooned "high-fare" rivals as "rip-off merchants" who were "raping" passengers and hiring lawyers and lobbyists to stymie low-cost competition.

Victor

http://content.eircom.net/content/irelandcom/breaking/1742419?view=Eircomnet

O'Leary attacked over outburst on compensation law
From:ireland.com
Friday, 24th October, 2003

A Scottish MEP has launched a ferocious attack on Ryanair's Mr Michael O'Leary over the airline chief's condemnation of the new EU compensation deal for passengers "bumped off" flights.

Mr O'Leary claimed the legislation would drive up the cost of flights for passengers, launching an expletive-laden attack on the EU at a meeting in Brussels yesterday.

"We are not going to be shouldered with stupid legislation coming out of Brussels which has no effect but to make air travel less competitive," he told the European Policy Centre meeting.

He described the new rules as "ill-conceived", "stupid", "unfair" and "a dog's dinner of nothingness", he argued that compensation should be linked to ticket price and warned that the airline industry would challenge the new rules in the European courts. Mr O'Leary also attacked his "high-fare" rivals as "rip-off merchants" who were "raping" passengers.

However, Mr David Martin, MEP for Scotland, claimed today Mr O'Leary's "motormouth" reaction was solely driven by greed.

"His attack on the new compensation deal for passengers who are badly treated by airlines like his can be explained in one word — greed," Mr Martin said. "He wants more for himself and less for everyone else."

"It has nothing at all to do with keeping fares low, giving passengers a better deal or improvements to service."

He asked why, if Ryanair is "so on the ball" and doesn't overbook flights as Mr O'Leary claims, "does the airline fear any impact from this legislation?"

Mr Martin said the EU legislation was intended to protect passengers and ensure there is a statutory minimum compensation that applies to all airlines.

Victor

http://www.rte.ie/news/2004/0126/air.html

New EU law on air passenger compensation
January 26, 2004

(19:59) Airline passengers who are let down by overbooked flights, commercial cancellations or long delays are to benefit from strengthened legislation approved by the European Union.

Under the new law, which will come into effect early next year, passengers will be entitled to between €250 and €600, depending on the length of the intended flight.

The law will cover chartered, as well as scheduled flights, and compensation will be paid immediately in the form of Electronic Bank Transfers, bank drafts or bank cheques.

Britain and Ireland voted against the law.

Victor

http://home.eircom.net/content/irelandcom/topstories/2426823?view=Eircomnet

Palacio says Ryanair should repay subsidies
From:ireland.com
Wednesday, 28th January, 2004

The European Transport Commissioner, Ms Loyola de Palacio, has recommended that Ryanair should repay subsidies it received from Belgian authorities at Charleroi airport, south of Brussels, which could amount to up to €13 million.

Commission sources told The Irish Times that Ms Palacio has concluded that reduced landing charges and ground handling fees at Charleroi are in breach of EU rules on state aid. A final decision will be taken by all 20 Commissioners next week and Ryanair is expected to mount a vigorous campaign to overturn Ms Palacio's recommendation.

In a decision that could have significant repercussions for low-cost air operations throughout the EU, Ms Palacio has also outlined strict conditions for state support for new routes, including that such support can be given for a maximum of three years.

Ryanair shares fell sharply in Dublin yesterday as a more unfavourable than expected ruling seemed likely. Shares fell from €7 to €6.75, down 3.6 per cent as the stock was heavily sold.

A Ryanair spokesman said the airline would appeal a decision it believed was unfair and warned that the terms of the ruling, as revealed, could be "disastrous" for low-cost airlines.

"All low-cost airlines will be materially affected and will impact on low fares for consumers," he said.

Ryanair pays landing charges at Charleroi at just 50 per cent of the published rate, an arrangement that Ms Palacio deems illegal state aid. She wants the airline to repay to the regional government of Wallonia - Belgium's French-speaking region - the difference between the preferential rate and the published rate.

Ms Palacio says that a ground handling charge of just €1 per passenger, which is a 90 per cent discount to its advertised €10 rate, also amounts to illegal state aid and she wants Ryanair to repay the shortfall. These arrangements were copperfastened in a 15-year agreement between the airport and Ryanair.

The Walloon government also gave Ryanair €2.5 million to cover the cost of office accommodation, marketing and other supports to Ryanair for introducing new routes from Charleroi. Ms Palacio says that such support is compatible with EU rules provided it complies with a number of strict conditions.

The routes must be clearly new; the cost of the support must be verifiable; the state support element can only account for a maximum of 50 per cent of the total cost of the service involved; and such support can be given for a maximum of three years.

Ms Palacio recommends that, if Ryanair's arrangements at Charleroi are found to have breached any of these conditions, the airline should repay to the Belgian authorities the cost of the support offered.

However, one source said the figure to be repaid could ultimately end up as low as €3 million. The Commission will discuss Ms Palacio's recommendation next week; Commission decisions need a simple majority.

The decision will affect Ryanair's deals at other state-owned airports across Europe.

Merrion Stockbrokers has estimated that a negative ruling could result in Ryanair having to repay up to €26 million to other airports. More expensive charges would also increase Ryanair's operating costs by as much as €33 million, or 11 per cent of its annual profits, according to Merrion.

The airline will report its third-quarter results today.

http://www.rte.ie/news/2004/0128/ryanair.html

Govt concerns over Ryanair state aid
January 28, 2004

(12:29) Transport Minister Seamus Brennan has raised concerns with the European Commission over the prospect that Ryanair may have to repay millions of euro for allegedly breaking rules on state aid to airports.

The minister said any decision to penalise Ryanair could have implications not just for the low fares airline, but also for Aer Lingus and regional airports in Ireland.

Recent reports suggest Ryanair may have to pay back between €4m and €13m to Belgium's regional Walloon government for discounts the airline receives to land at Charleroi, south of Brussels.


Warning of end to low fares

Earlier, Ryanair chief executive Michael O'Leary said a draft of the European Commission decision on Charleroi, which the company has seen, could bring an end to low fares air travel in Europe.

And speaking on RTÉ's Morning Ireland, Ryanair deputy chief executive Michael Cawley, said that from what the airline understood, the commission's findings would be negative about the Charleroi agreement, but would also apply to almost every other airline deal done with European airports for the last 20 years.

Mr Cawley claimed that Aer Lingus's discount deals with Aer Rianta, for example, could be found to be illegal and repayable.

He signalled that Ryanair would appeal any adverse decision from Brussels, adding that the 'legal eagles' in Europe would not reverse the move towards low fare airlines.

Meanwhile, shares in Ryanair fell by more than 25% in Dublin this morning after the company warned that lower fares would results in a fall in its full-year profits.

Victor

http://home.eircom.net/content/irelandcom/topstories/2433375?view=Eircomnet

Ryanair's share value drops by €1.3bn
From:ireland.com
Thursday, 29th January, 2004

Around €1.3 billion was wiped off the value of Ryanair yesterday, following a profits warning by Europe's biggest low-fare airline.

Ryanair shares tumbled by 28 per cent, falling from €6.75 to €4.86 in Dublin yesterday, which left them hovering at lows last seen immediately after the September 11th, 2001 terrorist attacks on New York and Washington.

By close of business, Ryanair's stock market value had shrunk from €5 billion to €3.7 billion with chief executive Mr Michael O'Leary admitting that the meltdown may continue for some days and weeks yet. Market sources also reported some resentment among investors who were annoyed that members of the Ryan family had recently sold 6.4 million shares at a price of €6.90.

The airline stunned the market by declaring that its profits for the 12 months to the end of March next would be 10 per cent below expectations at €215 million because it had been forced to cut its fares more aggressively in response to increased competition. It said the euro's strength was also affecting its business.

In the three months to the end of December 2003, the airline reported a 10 per cent rise in after-tax profits when adjusted for exceptional costs, which was below market forecasts.

More worryingly though, it said that bookings in 2004 had declined and that the yield per passenger would fall by between 25 and 30 per cent as it slashed prices to stimulate demand. It cautioned that this trend would continue this year.

Announcing the figures yesterday, Mr O'Leary tried to soothe investor nerves by saying the airline was still generating world-leading profit margins through aggressive cost management and its low-cost base.

Sentiment towards Ryanair had disimproved in recent days, particularly as an investigation into illegal subsidies it received at Charleroi airport in Belgium seemed likely to demand the repayment of these monies. Ryanair estimated that at worst it could have to repay €5 million to the Walloon regional government which owned the airport. Other analysts have put the figure as high as €13 million.

Mr O'Leary said the "rumblings" from Brussels indicated that the ruling, expected next week, would be the most negative decision possible for European low-fare airlines.

The Commission has also signalled that it would bar discounts on landing and ground handling being offered at state-owned airports and would restrict marketing incentive arrangements to three years.

Mr O'Leary said that the most worrying aspect of the ruling was that the Commission seemed to be trying to impose these rules on privately owned airports across Europe which had received state aid. "It is difficult to see how the Commission could draft such a backward judgment. It will set back European air travel by 5,000 years. They are taking us back to Stalinist Russia," he said yesterday.

The airline's deputy chief executive, Mr Howard Millar, said the ruling could affect Ryanair's arrangements at airports in Ireland, France and Spain in particular. He estimated that Ryanair could have to repay "several million euro" to Aer Rianta alone.

One analyst asked Mr O'Leary if he should resign, suggesting that his snide remarks about Commission officials may have contributed to the scale of Ryanair's likely defeat.

"Some people will believe that my handling of the case has caused this and I would find it hard to disagree with elements. If that is the case, then the ultimate responsibility rests with me and that is a matter for the board and our shareholders," he replied.

Victor

http://home.eircom.net/content/irelandcom/topstories/2446103?view=Eircomnet

Ryanair may have to pay EUR3-4m
From:ireland.com
Saturday, 31st January, 2004

The European Commission is likely to tell Ryanair that it will have to repay between €3 million and €4 million in subsidies and supports to the Belgian regional government that runs Charleroi Airport.

The Irish Times learned last night that EU Transport Commissioner Ms Loyola De Palacio is likely to value the supports that Charleroi has given Ryanair at between €9 million and €10 million over the last three years.

However, it is understood she will order that only a portion of that figure, between €3 million to €4 million, should actually be repaid. Ms De Palacio's report is due on Tuesday and it broadly favours the principle of state airport authorities offering transparent discounts and supports to new operators and routes for up to three years.

The commissioner has found that many elements of the deal between the Walloon regional government, which owns Charleroi Airport, and Ryanair, are in line with this. However, she argues that some elements of the deal, including landing charge discounts, breach EU rules on state aid to private industry. This is because they apply only to Ryanair and the charging structure is not transparent. Thus, the airline will have to repay a proportion of the total value.

The €3-€4 million estimate of the likely repayment demand is well below what some analysts predicted earlier. Their forecasts generally came in at €10-€13 million. The airline itself claimed the figure might be €5 million. Speculation over the final cost and its first profit warning for seven years kept it in the headlines this week. On Wednesday, a selling spree of its stock wiped €1.3 billion off its value.

Significantly for Ryanair's efforts to control its future cost base, under the decision even those supports which the commissioner believes to be legal will have to end this year. Its agreement with the Walloon government is for 15 years.

However, some sources last night suggested that the airline could still benefit from low landing charges at the airport, if Charleroi agrees to offer the same cuts to all other existing and potential operators. It is understood that the Walloon government is considering doing this. One Irish analyst said that "things may not change very much at Charleroi" for the airline as a result of the process.

The airline is also likely to encounter some change in charges for baggage handling and related services. Charleroi is effectively providing these to Ryanair at a loss. However, under EU transport regulations, once the airport is processing more than two million passengers a year, it has to put its ground-handling service out to tender.

It is currently handling around 1.75 million, and is expected to pass the two million threshold within a year. This will oblige it to put the service out to tender, and it is not known how this will impact on ground handling costs at the airport at this stage.

The report addresses a range of issues, and establishes guidelines for airport-airline agreements on landing and other charges. The Commissioner is due to publish it on Tuesday.

Sources said that Ms De Palacio has made every effort to ensure that the document is legally airtight, as Ryanair has already signalled that it could challenge its findings in the European Court of Justice. Its competitors may also take up cudgels on the basis that the document and its findings do not go far enough.

In Dublin yesterday Ryanair gained two cents to close at €4.87 after nine million shares changed hands. London warmed to the airline slightly with almost eight million shares sold, leaving it 10 cents or 2 per cent ahead at €4.95. The stock was also supported in late afternoon trade in New York.

http://www.onbusiness.ie/2004/0130/ryanair.html

Commission may allow most of Ryanair deal
January 30, 2004

(07:39)
Reports from Brussels last night say the EU Commission is expected to rule that Ryanair must repay around a quarter of the subsidies it received from Charleroi airport.

A source quoted by the Reuters news agency said the rest of the subsidies would be allowed in the ruling, which is due on Tuesday. According to Commission calculations, Ryanair would then have to pay between €2m and €7m.

Yesterday a group which represents Europe's regions said next week's ruling was is a direct threat to the existence of regional airports.

Onno Hoes, who coordinates the Assembly of European Regions' aviation group, said the Commission had to be aware of the issue's regional dimension. He said many regions were profiting from low-cost carriers' use of underused airports.

He said the Commission's decision could lead to the abandonment of regional airport with an enormous impact on regional development plans.

The AER said the recent use of small regional airports by budget airlines had allowed small and medium enterprises to gain access to the international market at reasonable costs.

http://home.eircom.net/content/unison/national/2446291?view=Eircomnet

Ryanair to make €17m profit on passenger wheelchair levy
From:The Irish Independent
Saturday, 31st January, 2004
Martha Kearns

RYANAIR is set to make millions in profit from a 73c charge it slapped on all its passengers yesterday which it claims is to provide wheelchairs for a small number of people at four airports.

The airline is facing a major backlash over its decision to introduce the levy which, it said, comes as a direct result of losing a court case in London yesterday taken by a man who was forced to pay £18 (€26) for the use of a wheelchair at Stansted.

Industry sources put the number of wheelchairs used by Ryanair at Dublin, Shannon, Stansted and Gatwick - the only main airports where charges for the service apply - at under 100 a day.

With an average price of €20 charged by the private operators who provide the chairs, that works out at less than €730,000 a year.

Yet Ryanair will rake in €17.5m - based on annual passenger numbers of 24m. The company claims it regrets the levy but insists it had no alternative.

The airline says the court decision was "defective" and said it would "regrettably be levying a charge of 50p (73c) on every passenger carried to meet the cost of wheelchair assistance at Stansted, Gatwick, Dublin and Shannon airports".

"Ryanair regrets this small levy but this defective County Court decision leaves us with no alternative," said the airline spokesperson who added that the levy would be withdrawn if an appeal was successful.

Ryanair is the only airline operating out of Ireland which does not pay for wheelchair hire but instead charges the passenger directly. Its argument is that the airports should pay the fee as happens in most of the airports in which it operates.

However, an Aer Rianta spokesperson said the passenger was the responsibility of the airline and not the airport and all other airlines paid the fee.

In 1999, Aer Rianta introduced a bye-law requiring all airlines, service providers and other agencies conducting business at its airports to provide reasonable facilities for all passengers with disabilities.

At the time, Aer Rianta said the decision was made following numerous complaints in this area about one airline - Ryanair.

After yesterday's decision, the airline was severely criticised by politicians and disability groups in Britain. Here, Labour MEP Proinsias de Rossa said Ryanair was arguably using the reason for the hike as "a smokescreen" which was probably driven by a desire to raise profits.

People with Disabilities in Ireland has called on the airline to reconsider its decision. Its chief executive, Michael Ringrose, said that while it appeared that Aer Rianta should provide wheelchairs to passengers as a matter of courtesy, many airlines carried the burden of costs which did not appear to be of undue proportion.

"It is totally unfair to charge a vulnerable section of society for the use of wheelchairs, particularly in the immediate wake of the European Year of People with Disability.

"I am calling on Ryanair to rethink their decision and provide courtesy wheelchairs in advance of an EU directive which will make it compulsory to do so in a very short time," said Mr Ringrose.

Equality Authority ceo Niall Crowley said it was up to Ryanair how it managed its costs but the 73c charge seemed to be "quite an exaggeration of what the cost would be".

"I'm quite lost as to how they would estimate the cost. Providing wheelchairs is not a high-cost business."

Capt'n Midnight

Yet Ryanair will rake in €17.5m - based on annual passenger numbers of 24m. The company claims it regrets the levy but insists it had no alternative.

Nice one - using the wheelchair levy to pay back the money to the Belgians - and they might only have to pay €3m.

Victor

http://www.thepost.ie/web/DocumentView/did-769137959-pageUrl--2FThe-Newspaper-2FSundays-Paper-2FNews.asp

Ryanair ready for Charleroi
25/01/04 00:00

Shareholders who have experienced a bumpy ride in Ryanair over the last year can expect a clearer view of where the company is going following the publication of the European Commission's report into its deal with Charleroi Airport on February 3, writes Ed Micheau.

Ryanair will report third quarter results on Wednesday, January 28, after it moved the results forward from February 3. This will free up management to tackle the Charleroi ruling head on.

Weakness in the share price last week was attributed by traders to an expected softening in yields - the prices the airline charges - in the final quarter rather than the pending announcement on Charleroi. Ryanair is expected to signal to the market that yields will fall by closer to 15 per cent in the quarter than the anticipated 10 per cent.

Media reports suggest Ryanair will be required to repay some of the benefits it received to set up its base at Charleroi.

Victor

http://www.breakingnews.ie/2004/02/01/story132214.html

Ryanair to take legal action over subsidies at state airports
01/02/2004 - 4:26:36 pm

Ryanair says it is planning legal action against other airlines receiving subsidies at state airports if the European Commission rules against its case at Charleroi.

The EC will rule on Tuesday on whether discounts Ryanair received at the regional Belgian airport were illegal.

The airline says that if it loses the case it will pursue every other airline receiving state aid to fly into European airports.

Victor

I would have thought Aer Rianta would love to get all the discounts back

http://www.thepost.ie/web/DocumentView/did-576252465-pageUrl--2FThe-Newspaper-2FSundays-Paper-2FNews.asp

Aer Rianta braces for Charleroi fallout
01/02/04 00:00
By Niamh Connolly

Aer Rianta may be forced to revise the concession period for its airline discount scheme from five years down to three years following the leaked European Commission judgment on Ryanair subsidies at Charleroi.

The judgment is due to be released on Tuesday.

The airport operator may also be forced to abandon its new growth incentive scheme at Shannon airport, which began on January 1, on the back of the EU judgment.

The judgment on Charleroi airport, which ruled out state subsidies to Ryanair, could have implications for discount schemes at every state-run European airport, Aer Rianta conceded. The state company's support schemes at Cork and Shannon for airlines starting new routes span five years, but the EU judgment implies that such schemes should not exceed three years.

Discounts should not amount to over 50 per cent of the cost to the airline of setting up a new route and should be published and verifiable, according to the judgment.

Ryanair raised the stakes last week by suggesting that an airline availing of any of Aer Rianta's discount schemes would have to repay Aer Rianta for historical incentive schemes.

Ryanair has received incentive supports valued at €60 million from Aer Rianta between 1998 to 2001, according to a statement from Aer Rianta chairman Noel Hanlon to a Joint Oireachtas Committee on Transport.

Even if the value of Aer Lingus subsidies amounted to only half Ryanair's figure, it would be a financial setback for the national carrier.

Aer Lingus has availed of discounts on 11 of the 30 new routes launched in the past two years, but the airline said it had not availed of growth schemes.

Any move by the EU to force all airlines to repay historical discounts that are in line with current deadlines would almost certainly be met with legal action, according to aviation sources.

The capacity of the Ryanair chief executive, Michael O'Leary, to bargain with airports for enhanced supports over and above official schemes is likely to be eliminated.

Ryanair demanded eight special state supports, valued by Aer Rianta at more than €25 million, in return for increasing its throughput at Dublin Airport by a promised 1.5 million passengers in 2002.

As revealed by this newspaper, O'Leary sought concessions in return for allocating a second aircraft to Shannon Airport in 2003, including the extension of existing discounts for Frankfurt, Paris and Brussels for a further four years.

Aer Rianta refused Ryanair's demands on the grounds that they would almost inevitably be challenged by rival carriers on competition grounds.

The benefits sought by Ryanair at both Dublin and Shannon airports included "a onceoff allocation from marketing funds of €250,000 per aircraft paid on the day each aircraft commences operations", according to the airline.

They also included priority access to terminal stands and boarding gates over other airlines.

O'Leary also requested: "Aer Rianta are to install and meet all Ryanair's communications and staff accommodation requirements free of charge".

Aer Rianta this weekend said it was confident its route incentives were transparent and approved by the relevant authority in Brussels, as well as the Irish Competition Authority.

Aer Rianta's discount scheme is published on its website.

"If subsequent new guidelines from the EU transport directive requires us to make amendments to the existing scheme, we will, of course, comply," a spokesperson said.

The authorities in Brussels assessed Aer Rianta's discount schemes three years ago and recommended changes that the company has pursued.

These included reducing the discount scheme from seven years to five years and applying the same landing charges for transatlantic airlines as for short haul.

Victor

http://www.rte.ie/news/2004/0203/ryanair.html

O'Leary slams European Commission ruling
February 3, 2004

(16:36) Ryanair chief executive, Michael O'Leary, has accused the European Commission of meaninglessly interfering with the operation of the free market for air travel.

Mr O'Leary was reacting to the Commission's ruling that forces the airline to repay some of the subsidies it received to land at Charleroi airport in Belgium.

Speaking at a press conference in Brussels, Mr O'Leary said the ruling was bizarre and a disaster for consumers, low fares airlines and publicly owned airports which he said can no longer compete with their privately owned competitors.

Mr O'Leary said Charleroi airport had been empty five years ago, when Ryanair negotiated what he said was an 'intelligent, low cost arrangement' which has made the airport profitable and saved travellers millions.

Ryanair is to appeal the ruling to the European Court of Justice.


Ruling 'balanced': EU Commission

Announcing the ruling earlier in Brussels, the EU Transport Commissioner, Loyola de Palacio, said Ryanair and the regional government which owned the airport had a secret agreement.

Some parts of the arrangement were found to be genuine regional development, but Ryanair will have to repay about €4m worth of subsidies which were found to be illegal.

Ms de Palacio said the decision was balanced, and would encourage the development of low-cost airlines by ensuring a level playing field.

Separately, the Minister for Transport, Seamus Brennan, called for a clear set of rules that would govern all deals between airlines and regional airports.

The Government is expected to push for the issue to be discussed at the next meeting of EU transport ministers on 12 March.

Victor

http://www.onbusiness.ie/2004/0203/ryanair.html

Commission rules Ryanair must repay

February 3, 2004
The European Commission has, as expected, ruled that Ryanair must repay some of the discounts granted to it for using Belgium's Charleroi airport.

The Commission said cut-priced rates offered exclusively to Ryanair for using Charleroi were illegal. But the airline will not have to repay all its subsidies, as some of the rebates were permissible as part of regional development support for the airport.

The EU Transport Commissioner, Loyola de Palacio, refused to put a figure on the amount Ryanair may have to pay back the Walloon regional government. At a press conference in Brussels, Ms Palacio said the total amount of aid received was estimated at €15m. A €1m subsidy on landing charges was given as a result of what she described as 'a secret agreement'.

But the overall amount will depend on just how much ground handling charges were subsidised by other activities at the airport. This will only be known when the airport's accounts are examined.

EU transport commissioner Loyola de Palacio said the ruling was 'well-balanced' and would favour airline competition.

'It will also help the development of low-cost operations which are very clearly what consumers want, while also ensuring equitable conditions of competition for all airlines,' she added.

Ryanair shares closed over 5%, or 24 cent, higher at €4.90 in Dublin this evening.

http://www.onbusiness.ie/2004/0203/ryanair3.html

Ryanair may axe some Charleroi routes
February 3, 2004
(19:44)

Ryanair has said it will appeal today's European Commission's decision to the European Court of Justice. Chief Executive Michael O'Leary said he believed the appeal will be supported by many other low fare airlines, regional airports and consumer groups.

Ryanair described the decision as bad news for consumers, bad news for low fare airlines and bad news for regional airports. In a statement, the airline said the decision confirms that the European Commission intends to increase costs and air fares for consumers.

'The decision is an attack on all low fare airlines and publicly owned airports and will equally affect Easyjet, Lufthansa and Flybe,' the statement added.

'Charleroi airport was empty five years ago. If this ruling applied back then it would still be an empty airport today,' CEO Michael O'Leary said. 'Underused secondary and regional airports must discount to attract low fares customers. Both Brussels Charleroi and Ryanair are profitable at these discounted rates.'

O'Leary said the impact of the commission's fine - seen at a maximum of €4m - was immaterial and that the ruling would not destroy Ryanair's low-cost business model.

'The impact on Ryanair was always going to be immaterial, it was never about the fine,' O'Leary said.

He said he would wait to examine details of the commission's ruling before deciding whether to axe routes and flights from Charleroi. 'If we are asked to increase our air fares by 6-8%, as the commission has suggested, then certainly some routes and flights will be diverted to private airports,' he said.

Even though Belgium's Walloon region, which controls Charleroi, has said it is willing to renegotiate its contract with Ryanair, O'Leary doubted this would be possible. 'We're doing deals for 15 and 20 years at private airports. This will only tie the hands of Charleroi and other public airports'.

'They will not be able to compete with the terms we have already negotiated at private airports,' he added. 'Charleroi will be obliged to comply with this decision.'

Victor

http://www.onbusiness.ie/2004/0203/ryanair2.html

Ryanair load factor down to 71%
February 3, 2004
(10:51)

Ryanair carried just over 1.7 million passengers in January, but its load factor - the percentage of seats filled - dropped to 71%.

Passenger traffic was up from the 1.25 million in the same month last year, but the load factor showed a five-point fall from 76%.

Last week, Ryanair shares plummeted following a warning that full-year profits would fall by up to 10% compared with last year because of lower average fares.

It is having to slash ticket prices in the face of intense competition in the low fare sector.

Victor

http://home.eircom.net/content/irelandcom/topstories/2465573?view=Eircomnet

Go received €1.5m support from Aer Rianta
From:ireland.com
Tuesday, 3rd February, 2004

Low-cost airline Go received up to €1.5 million in discounts and support from State airports authority Aer Rianta during its short-lived career offering flights between Ireland and Scotland, The Irish Times learned yesterday.

The Competition Authority said yesterday that Aer Rianta has agreed to change support schemes it uses to attract new passenger traffic to Dublin, Cork and Shannon airports. The announcement followed a 16-month investigation sparked by a complaint from Ryanair about the concessions it said Aer Rianta offered its competitor.

The low-cost airline, headed by Ms Barbara Cassani, launched services between Dublin and Glasgow and Edinburgh in 2001. Ryanair immediately went into direct competition with it, starting a price war that Go lost after nine months, when it was forced to end the services.

Because it was a new player, Aer Rianta granted Go a number of discounts on airport charges and support with marketing its services. It is understood that the value of these supports ran to €1-€1.5 million.

Ryanair complained to the Competition Authority a number of times during 2000 and 2001. The authority said yesterday that its investigation revealed that Aer Rianta appeared to administer its support schemes in a "confusing, arbitrary and less than transparent way".

It also stated that the schemes could have been inconsistent with Competition Act provisions banning the abuse of a dominant position. "The authority felt that Aer Rianta should have been able to provide the necessary clarity and transparency without compromising commercial sensitivities," its statement said.

The authority's concerns were focused on the marketing supports Aer Rianta offered to new entrants to Irish airports and to airlines operating new routes. These account for 10 per cent of its incentive schemes, which include airport charge discounts.

Last night, Aer Rianta said it had always tried to ensure that it operated its incentive schemes in a fair, objective and non-discriminatory manner.

"By far the most important incentive schemes operated by Aer Rianta over the last 10 years have been the route-support schemes offering various levels of discounts on standard airport charges," its statement said.

"These schemes have always been published and fully transparent, unlike the case in many other airport companies.

"Aer Rianta acknowledges that certain measures proposed within the last two years by the Competition Authority would further enhance the clarity of its specific marketing support schemes. Aer Rianta is incorporating these recommendations into its current published schemes."

The competition watchdog's inquiry looked at transparency, whether the schemes discriminated against some airlines, the justifiable business argument for offering them and Aer Rianta's level of market power, which established that 90 per cent of passengers pass through its airports.

Victor

http://www.ireland.com/newspaper/front/2004/0204/1002755704HMRYANAIRFRONT.html

Ryanair condemns EU on impact of Charleroi ruling

The European Commission and Ryanair have clashed on the implications of yesterday's landmark decision which will curb the incentives the airline can get at Charleroi Airport, near Brussels, write Denis Staunton in Brussels and Siobhán Creaton

Both parties agree it will lead to higher fares, but differ on the extent of the impact.

The low-cost airline said yesterday that the Commission decision was a disaster for low-fare travel and small regional airports and would inevitably lead to higher fares.

However, the Commission rejected this, saying the Ryanair deal at Charleroi had undermined other carriers, and its ruling would actually encourage development of the low-cost sector.

The long-awaited Commission decision on grant-aid which Ryanair had received from the regional Walloon government to fly to the small airport was more lenient than expected.

It followed intense lobbying by the company and politicians in Europe.

The decision will see Ryanair repay up to €4 million instead of up to €15 million, and other supports it got from the airport will be curtailed to run for five years rather than 15. It had been expected that these supports would be limited to three years.

However, despite this, Ryanair's chief executive, Mr Michael O'Leary, said the airline would appeal the ruling in the European Courts. He denounced the European Commission as "an evil empire" and said the decision was a disaster for low-fare travel all over Europe.

The EU Transport Commissioner, Ms Loyola de Palacio, had planned to use the ruling to establish guidelines for the scope of deals that could be negotiated at other airports. This didn't materialise and will now be discussed by Europe's transport ministers when they meet next month.

Ms de Palacio conceded that the ruling will result in a possible €3-to-€4 increase on each ticket to the airport. Mr O'Leary rubbished this claim and said the increase would be twice as much.

He denounced the decision as a bizarre action that sought to overturn 20 years of deregulation and competition in the EU.

"We consider this to be a disaster for consumers. It's a disaster for low-fare travel all over Europe and it's a disaster for state-owned, regional airports," he said.

Ms de Palacio dismissed this criticism and said the ruling was good news for low-cost airlines and for regional airports. The Commission wanted to guarantee equal treatment for all operators.

The Commission has asked the Belgian region of Wallonia, which owns Charleroi Airport, to respond to the decision within two months.

The Minister for Transport, Mr Brennan, said that while the outcome was disappointing for Ryanair it had won concessions that could influence the wider implications for its deals at other European airports.

"I am greatly relieved that the Commissioner listened to us and other transport ministers in not moving on general rules. Now 25 others will have an input," the Minister said.

Victor

http://home.eircom.net/content/irelandcom/topstories/2472551?view=Eircomnet

Ryanair condemns EU on impact of Charleroi ruling
From:ireland.com
Wednesday, 4th February, 2004

The European Commission and Ryanair have clashed on the implications of yesterday's landmark decision which will curb the incentives the airline can get at Charleroi Airport, near Brussels, write Denis Staunton in Brussels and Siobhán Creaton

Both parties agree it will lead to higher fares, but differ on the extent of the impact.

The low-cost airline said yesterday that the Commission decision was a disaster for low-fare travel and small regional airports and would inevitably lead to higher fares.

However, the Commission rejected this, saying the Ryanair deal at Charleroi had undermined other carriers, and its ruling would actually encourage development of the low-cost sector.

The long-awaited Commission decision on grant-aid which Ryanair had received from the regional Walloon government to fly to the small airport was more lenient than expected.

It followed intense lobbying by the company and politicians in Europe.

The decision will see Ryanair repay up to €4 million instead of up to €15 million, and other supports it got from the airport will be curtailed to run for five years rather than 15. It had been expected that these supports would be limited to three years.

However, despite this, Ryanair's chief executive, Mr Michael O'Leary, said the airline would appeal the ruling in the European Courts. He denounced the European Commission as "an evil empire" and said the decision was a disaster for low-fare travel all over Europe.

The EU Transport Commissioner, Ms Loyola de Palacio, had planned to use the ruling to establish guidelines for the scope of deals that could be negotiated at other airports. This didn't materialise and will now be discussed by Europe's transport ministers when they meet next month.

Ms de Palacio conceded that the ruling will result in a possible €3-to-€4 increase on each ticket to the airport. Mr O'Leary rubbished this claim and said the increase would be twice as much.

He denounced the decision as a bizarre action that sought to overturn 20 years of deregulation and competition in the EU.

"We consider this to be a disaster for consumers. It's a disaster for low-fare travel all over Europe and it's a disaster for state-owned, regional airports," he said.

Ms de Palacio dismissed this criticism and said the ruling was good news for low-cost airlines and for regional airports. The Commission wanted to guarantee equal treatment for all operators.

The Commission has asked the Belgian region of Wallonia, which owns Charleroi Airport, to respond to the decision within two months.

The Minister for Transport, Mr Brennan, said that while the outcome was disappointing for Ryanair it had won concessions that could influence the wider implications for its deals at other European airports.

"I am greatly relieved that the Commissioner listened to us and other transport ministers in not moving on general rules. Now 25 others will have an input," the Minister said.

Victor

http://home.eircom.net/content/irelandcom/topstories/2479359?view=Eircomnet

Ryanair blow not fatal - analysts
From:ireland.com
Thursday, 5th February, 2004

Ryanair will suffer as a result of the European Commission ruling on illegal subsidies but the decision is not as bad as portrayed by the company, analysts said yesterday.

Shares in the company rose again yesterday, closing above €5 for the first time since it issued a profit warning last week. The stock rose 3.4 per cent higher yesterday to €5.12 in Dublin.

But Irish dealers said the share price was likely to remain rangebound between €4.75 and €5.25 until there was some clarity on yields. This is not expected until the end of the group's key second-quarter, which runs to the end of September.

Airport operators fear the Commission decision to force Ryanair to pay back €4 million of the money received from Charleroi airport may lead to a series of clashes over subsidies.

Mr Philippe Hamon, director general of Airports Council International (ACI) Europe, said: "I think we will see a series of clashes... it will be messy."

He said the EU needed to issue comprehensive guidelines to prevent a long series of complaints, investigations and court cases involving airlines and airports.

Ryanair's chief executive, Mr Michael O'Leary, has said the airline will appeal the Commission decision.

The airline suffered another slight yesterday when the British advertising watchdog ordered it to drop a claim that "only Ryanair has the lowest fares".

The Advertising Standards Authority said the claim was misleading because Ryanair didn't offer lower fares than its competitors on all routes at all times. The complaint had been lodged by rival EasyJet.

Citigroup Smith Barney said the company's earnings should be back on track by the end of this year. "We believe most of the downside is in the share price and do not expect further profit warnings," said Citigroup analysts Mr Andrew Light and Mr Paul Dewberry. "Ryanair's business model, cost advantage and growth opportunities... are likely to remain superior to the rest of the low-fares sector."

Citigroup lowered the company's rating one notch to "high-risk hold", saying the the group's excessive capacity remained a bigger cause of concern than the EU ruling.

ABN Amro, which has been bearish on Ryanair, raised its rating from "sell" to "reduce". "The ruling is not a disaster for Ryanair but should increase its airport and marketing costs." - (Additional reporting, Reuters)

Victor

Well it looks like they get to reduce their published charges by not having to subsidise Ryanair and get other business in. Oooh, maybe Mick doesn't like competition.

http://www.breakingnews.ie/2004/02/06/story132989.html

New rivals for Ryanair at Charleroi
06/02/2004 - 12:37:45 pm

Two additional low-cost airlines are to join Ryanair in operating from state-owned Charleroi airport.

Ryanair currently accounts for the bulk of traffic at the airport.

Wallonia's Economics Minister Serge Kubla said today at a news conference that one Polish and one Italian airline had decided to start operations from the airport, which is 40km south of Brussels.

Earlier this week the European Commission ordered Ryanair to repay millions of euro in Belgian subsidies, a decision CEO Michael O'Leary condemned as a disaster for budget travel and traffic-starved regional airports.

Victor

http://www.thepost.ie/web/DocumentView/did-194150561-pageUrl--2FThe-Newspaper-2FSundays-Paper-2FNews.asp

Delay expected on EC's Ryanair ruling
08/02/04 00:00
By Eamon Quinn and Sean Mac Carthaigh

The European Commission's controversial ruling that Ryanair received illegal state payments at Charleroi airport is likely to be stalled, amid mounting political fury.

Ryanair's confident claim that it will gain a stay and succeed in an appeal has won support among competition experts in Brussels.

New tariffs demanded by Commissioner Loyola de Palacio will not be implemented immediately so Ryanair will continue to benefit from existing cut-price Charleroi charges for several months, by which time the airline is likely to have its appeal underway.

It also emerged this weekend that Charleroi could avoid the ruling by selling up to 20 per cent of the airport to private investors. That would remove the airport and the Belgian authorities from the clutches of the commission.

The Assembly of European Regions (AER), which acts for regional governments, who have the most to lose from the ruling, is planning a crisis meeting on Thursday in Brussels. The single item on its agenda is the Ryanair ruling.

"The commission should not have got involved," said Franz Shummann, deputy secretary general at the AER. "We believe great damage has been done. Something now needs to be done - and fast."

The AER is pressing for Europe's under-used regional airports to be treated the same way as the European trans-regional roads and railways, which are promoted by the commission.

The EC ruling has also raised fury closer to home. Behind the scenes, the Irish government has lambasted the commission, regarding it as a "solo run" by Palacio. It wants the decision overturned.

It is understood that the Taoiseach and several members of his cabinet regard the ruling as an act of gross political stupidity, at a time when the European Union requires positive public sentiment at the polls. It's understood they have expressed their views to EC officials.

Meanwhile, Ryanair chief executive Michael O'Leary has vowed he will take the battle to the commission. "We will go for a stay on the ruling," he told The Sunday Business Post.

The commission ruled that Ryanair benefited from a landing charge half that of the rate publicly advertised by Charleroi. It will eventually force the Belgian authorities to impose higher rates.

"At some point the Belgians will tell us that they want us to pay stg£2 a passenger and we will tell the Belgians to go screw themselves because we have other airports out there who will charge us less," O'Leary said.

O'Leary said that Charleroi could avoid hiking rates by publicly advertising the lower Ryanair tariffs.

"Another way for the Belgians to respond to the commission is to say they will privatise the airport - they could do that in the space of two months by selling 10-20 per cent of it."

Victor

http://home.eircom.net/content/irelandcom/topstories/2998730?view=Eircomnet

Brussels to investigate Ryanair deal
From:ireland.com
Monday, 12th April, 2004

The European Commission is to investigate a deal struck between Ryanair and the Walloon government to keep the Irish low-cost carrier flying to South Brussels Charleroi airport.

The Walloon government said on Friday that it and Ryanair had reached an agreement over subsidies under which the fees levied on the carrier would remain unchanged.

By adjusting local taxes for all carriers arriving at Charleroi, Ryanair will pay no more than the €5 per passenger it is currently charged for its 11 routes into the airport.

However, the deal will have to be renegotiated once Charleroi starts to handle more than two million passengers a year, because beyond that point the Commission has ruled that the airport's subsidies must end.

Last year, 1.8 million passengers flew via Charleroi.

It also comes too late to save Ryanair's service from London's Stansted airport to Charleroi, which will be cut at the end of this month. This route served 150,000 passengers last year.

The Walloon government has also suspended plans for a $100 million new airport terminal, capable of handling four million passengers a year, because of uncertainty over new Commission rules on airport subsidies.

In February, the Commission outlawed some of the subsidies Ryanair was receiving from the Walloon government and ordered the airline to repay up to €4.5 million.

Wallonia and Ryanair hope to meet the Commission's desire for fairness by cutting the passenger tax from €7 to €1 and raising the handling tax from €1 to €3 for each person arriving at Charleroi. The landing tax will be frozen at €1 per passenger.

A Commission spokesman said the Belgian government had yet to present a plan to implement the Commission's February ruling.

"If Friday's discussions fall within that framework, it will have to be notified and investigated by the Commission," he said, emphasising the Commission had not seen a copy of the agreement.

Ryanair is due to make a statement about the deal tomorrow. It accounts for 90 per cent of the passengers at Charleroi with the rest coming from French and Polish charter flights.

The Commission is due to present new guidelines on airport subsidies and all airline contracts this year. - (Financial Times Service)

Victor

http://www.timesonline.co.uk/article/0,,2091-1070050,00.html

Ryanair last week reported an improvement in punctuality. But what of the state of its aircraft? On a recent flight from Malaga to Dublin, the arm-rest snapped from Sue’s seat and part of the plastic covering from an overhead bin fell, nearly knocking a €10 snipe of champagne from your diarist’s hand. When presented with the offending items, an air hostess snapped “put them back where you got them”. Luckily for Ryanair, Sue used to make model airplanes with Airfix glue. Maybe it’s time Michael O’Leary invested in some.