So what if the €600mln is adding to revenue? That doesn't mean its adding to net profit, because you have to factor in the cost of aircraft, crew, fuel, marketing, fees etc. It costs money to start new routes, and thats what the support funding Ryanair receives goes toward. I mean thats the whole point of these arrangements Ryanair has with airports, if they want new routes Ryanair will give them but they have to share the costs. If costs get too high, and the airport doesn't reduce fees, then Ryanair will pull the routes(as they have done several times) once they become unprofitable.
Of course it is adding to both Gross and Net Profit!. Do you really think that Ryanair would commence routes if they were not going to be profitable to them? Of course I am well aware of all the associated costs with starting a new route, but its not difficult is it when you are demanding below norm airport charges (below those charged to competitors operating from the same base at that) and are threatening to pull out if you don't continue to receive them!
Where these arrangements become illegal and may be considered state aid is when they're offered to 1 airline but not another, they have to be offered to all airlines, so theres nothing to stop any other airline getting the same deal as Ryanair. The only reason other airlines don't get the same deal is because theres not many airlines buying new aircraft and expanding at the rate Ryanair is.
I don't seem to hear much about Ryanair buying new aircraft? Any of their deliveries in the recent past are for aircraft that have already been purchased. It was only recently that FR came out with the publicity statement that they were not purchasing another large batch of aircraft because they apparently couldn't reach a deal with manufacturers. If, in reality, there was a viable need for such further expansion and that it was going to be profitable, they would of course have reached a deal! The reality is any such purchase would have a significant negative impact on FR's Gross cash position and as it is they are going to end up with a surplus of aircraft from all of the deliveries.
In addition, its not as if another carrier is going to go into an obscure airport or airbase that already will only have the demand to support one carrier such as FR.
Also, it has been stated that several of these subsidies have been awarded on an annual basis. Are they beginning the same route on an annual basis?? Certainly not!
And in relation to the Strasbourg case you selectively quoted, the European Court of First Instance found in 2008 that Ryanair was not in receipt of state aid or subsidies in relation to it's arrangement with Brussels-Charleroi Airport, which Air France claimed was a form of subsidy. The ECFI held that publicly owned airports like Brussels Charleroi were free to enter long-term, discounted arrangements with airlines in return for new route and traffic growth and in so doing, the Court dismissed the EU Commission’s claims that Ryanair’s cost base at Charleroi included State aid or subsidies. So the previous case in relation to Strasbourg is irrelevant.If you want to talk about state aid, why not mention the €400mln KLM received from Amsterdam Airport last year?
I did not selectively pick any one example. You have selectively quoted what I posted. Read down further and I gave at least two other examples. I will also remind you that my first comments simply related to the fact that its unreasonable to be making any comparisons with the cost base of FR, due to the entirely different nature of its business model, along with the fact that it can rely on a substantial amount of annual subsidies which Aer Lingus simply cannot.
I have no interest in KLM, they are not competing with EI and the topic of discussion here was a comparison of the EI/FR cost base. In any case, is the €400m you mentioned annualised, available per annum? It has been widely reported that FR are receiving €600m, or 33% in excess of the amount that KLM received.
Just more Ryanair-bashing using past cases that were effectively overturned with the 2008 judgement, which you conveniently forgot about...
On the contrary.... just more FR supporting sentiments from you. The bottom line is, that in spite of all of the above comments that you have made, my original point certainly holds true in that it is impossible to make any real or meaningful comparison between the cost base of FR and EI, for the above mentioned reasons.
Also, back to your original point and to honestly suggest that the €600m is not adding to the overall FR net profit..... I mean do you really believe that FR would enter into anything that would result in losses for them, apart from of course their attempted takeover bid in trying to ruin and undermine the share price of EI - which I will remind you that despite resulting in significant write downs in the past 18 months, actually resulted in an upward trend in the Revaluation reserve on FR's books of circa €25 million in the recent past contributing to overall increases in equity as the EI share price has gradually recovered in terms of LRAvg in the past 12 months.