View Full Version : Ryanair appeal thrown out.
Scottie
18th Sep 2003, 21:11
According to BBC News 24 the court has just thrown out Ryanairs appeal over the court ruling which stopped the incentive payments from Strasbourg Airport.
Commentator stated that this would have consequences for Ryanairs business model.
jetstream7
19th Sep 2003, 00:30
Scottie
Wrong...or at least I wouldn't say the appeal hasn't been thrown out
The French appeal court of Nancy has stated Ryanair cannot continue to fly to Strasbourg whilst they are waiting for the answer to their appeal - this could take up to a year
Not quite the same
(If the actual appeal was rejected, then yes, this could have an effect on the Ryanair business model, but any large, well run, strongly led company would no doubt be considering all options.)
Interesting times!
Whether this will affect the airline's business model in the medium to long term is anybody's guess at this point.
The airline uses a number of public or semi-publicly owned airports as well as private airports.
The EC will be ruling on the Charleroi deal sometime during the next two months, and I think the outcome here will be more interesting; it's difficult to say what will happen.
My guess is that they may broadly accept the rationale behind these agreements but they may also demand complete transparency and a change in the tendering process. That might force the airline to revise its present agreements with various airports, but at the same time maintain the substance of those deals (i.e. the favourable fees and other incentives). Any 'new' rules would have to be observed in Ryanair's future dealings.
Brussels has publicly aknowledged the popularity of low-cost services, and maintained that their job is merely to ensure all those involved play by the rules.
Merely speculating though.
flyblue
19th Sep 2003, 01:50
From telegraph.co.uk
Ryanair loses appeal over Strasbourg flights
(Filed: 18/09/2003)
Ryanair, the budget airline, has failed to overturn a French court order suspending its service to Strasbourg.
A French appeal court rejected Ryanair's bid for a "stay" - effectively a temporary suspension - of the ruling which ordered that "incentive payments" to the company should end.
A tribunal in Strasbourg had previously ordered the city's chamber of commerce to terminate the agreement which saw it pay £1 million to Ryanair for starting up the service last October.
The case was brought after it emerged that Ryanair was under investigation by the European Commission over the cash benefits which may breach EU competition rules, including the benefits the airline enjoys from operating out of Charleroi airport in Belgium.
Ryanair criticised the suspension of its flights to Strasbourg, claiming that it had boosted jobs and tourism in the area after Air France had downgraded its services to the city over the past decade.
The airline had hoped to continue its service to Strasbourg pending the outcome of a full appeal on Sept 24. It will instead provide a service to Baden-Baden, in Germany, which is 25 miles away.
Jim Callaghan, Ryanair's head of regulatory affairs, said: "We are dismayed with the court's decision rejecting our application for a stay on the tribunal's decision, which would have enabled us to reinstate our highly successful London-Strasbourg route."
EU officials have admitted the Ryanair case could have widespread implications for the budget airline industry.
A commission spokesman has said that the Charleroi investigation is a "lead" case which could impact on the "whole system" of Europe's airline industry.
jetstream7
19th Sep 2003, 05:14
Just another thought...
As Ryanair won't be operating this route any longer, will Air France (or subsiduary) return, and will their fares equal Ryanair flight plus whatever subsidy FR have been receiving...?
:hmm: :hmm:
Whatever the rights or wrongs of the case, it is rather ironic to find that the company of which Brit Air is a subsidiary has been lavished by state subsidies for years. ;)
Two wrongs don't make a right, but consider the hypocrisy...
flyblue
19th Sep 2003, 05:41
Like any flag carrier at the time, AJ. That's ancient history.
Ancient History? Not at all. Air France is still a state concern & plans for privatisation have been continually postponed - it's now causing concern in the merger talks with KLM......Olympic continues to be a complete basket case, with the Greek govt desperate to dump it, the Swiss stumped up more cash to create another (failing) ego project, New Zealand bailed their airline out when it couldn't compete any longer.....subsidies are still alive & well.
This doesn't excuse the case of Ryanair as somehow being different of course, although one might argue that subsidies may have beneficial effects in some circumstances.
Again, I have no intention of defending Ryanair on this one, just trying to paint a balanced picture.
GROBIT
21st Sep 2003, 03:45
A question really, and forgive me if i'm wrong on this matter. I have always been led to believe that Air France have recieved government subsidize for years against EC laws on fair competition, but never the less have continued with this as without it the company would have long since disappeared. It strikes me that the French ignore all regulations that they don't like and complain about others that are more successful than them. Like a spoilt child really with a dash of arrogance self importance. Could anyone let me know if i'm wide of the mark or give me a more accurate picture.
Bre901
18th Dec 2003, 20:01
Sorry I did not find an English version yet.
AFP December 18th 2003
Automatic translation (Google)
Prohibited Ryanair of subsidies in Strasbourg the administrative Court of Appeal of Nancy cancelled Thursday the subsidies brought to the Irish company at low prices Ryanair by the Chamber of Commerce and Industry of Strabourg for the connection with London, one learned near the Clerc's Office. The administrative Court of Appeal "cancelled (...) conventions binding the Ryanair company and the Chamber of Commerce and Industry of Strasbourg" (CCI), indicated a clerk of the court joined by telephone. The administrative Court of Appeal of Nancy thus cancelled an agreement of partnership between the CCI of Strasbourg and granting Ryanair of the subsidies for the exploitation of the daily line Strasbourg-London. The cancellation of this agreement by the administrative court of Strasbourg on July 24 had led Ryanair to leave the platform of Strasbourg for that of Baden Baden."
Looks like I was not the fastest on that one, some posted while I was busy translating.
MODS : feel free to merge or edit
johnpilot
19th Dec 2003, 01:48
The title is not correct as the appeals court has not ruled that Ryanair's subsidies are illegal rather it ruled that it cannot return to Strasbourg until such time that a final decision has been made. The French news fails to mention that there has already been a decision in favour of Ryanair stating that the deal between Ryanair and Strasbourg does not constitute illegal aid and that Ryanair should return on the route as soon as possible. For more information on this you can check on the Ryanair website in the news section already two days ago, and you can check Reuters for an accurate account of the proceedings
As per the CRL case the commision was about to deliver their findings and they had even leaked to the press their negative views, only to have to pull back the last minute because it was advised by its legal team that their case would not stand in court (Luxembourg) if Ryanair appealed its decision. Do not think for a minute that the commision would be afraid of Ryanair and their threats to pull out of CRL if they knew that they were correct.
JP:D
FougaMagister
20th Dec 2003, 01:37
A few points that seem to have been missed in this thread:
- Air France has been consistently profitable since 1997 without ANY State subsidy
- The case was brought before the Administrative Tribunal by Brit Air (admittedly an AF subsidiary), NOT Air France
- Strasbourg/Entzheim airport is owned and operated by the local Chambre de Commerce et d'Industrie (CCI), therefore it is funded with taxpayers' money
- Under European Union competition rules, no public-owned (or private) company (whether airline or else) may be subsidised with taxpayers' money in a way that distorts competition - in other words subsidies are allowed if they are provided to ALL operators (for PSO for instance)
If the Strasbourg-Stansted route is only making money thanks to a subsidy, that means it's not viable on its own...
Looks like open season on FR these days, with the Charleroi case pending, and smaller French charter airline Air Mediterranée (probably emboldened by the Strasbourg verdict) launching a similar case against Ryanair regarding its agreement with Pau airport. IMHO, the result will be the same.
Too bad for the passengers, but that's what competition rules are all about...