EU alleges use of state subsidies to lure LCC's

[stalling attitude]

according to ft.com this morning Brussels is investigating the possible use of state funding to lure Ryanair to Charleroi . they are also investigating a couple of other airlines. They argue that they dont want public money to subsidise airfares.

[sky9]

In today's Financial Times, refer's to the subsidies paid to Ryanair by small regional airports.


http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1039523376384&p=1012571727108

[Flip Flop Flyer]

Wrong header mate, you should've picked something along the lines of "RYANAIR BUSTED BY BRUSSELS" and see the viewcount skyrocket.:p

In either case, ft.com either has a sense of humour or poor sense of geography. Since Charleroi (know to FR as Brussels South) is sort of in Belgium, your quote suggests that Brussels should investigate itself. I find that rather amusing.

In the meantime, over in the real world it's an EU body investigating whether Charleroi Airport and the local government "supported" Ryanairs' setting up of base and routes. Some call that for incentives, others call it bribery, in either case it is forbidden under EU law according to the investigators. It could be serious; last year Maersk Air and SAS was fined close to 100 MIL Euro for breaches of anti-cartel regulations. Wonder what the going rate for this kind is?

[Knold]

Agree.

BTW, nice to see you again Flip Flop!

[Jet II]

Am I the only person who doesn't see anything wrong with this. If the owners of a small regional airport (I assume the local government) want to entice airlines to use that airport and therefore increase the prosperity in the surrounding region then why not?

Or is this just more 'Ryanair Bashing'

[JW411]

This is more Ryanair bashing!

[Engee73]

Do you think the whole world is conspiring to 'bash' poor little Ryanair JW?

Its is certainly news if there is going to be a change of interpretation on this issue and it will obviously affect you.

Enough of this JW411 bashing :D

[JW411]

Engee73:

I was merely answering Jet II's rhetorical question. Whatever does or does not happen to Ryanair is of little interest to me and will not affect my flying career or my life one iota.

Perhaps I was obliquely commenting on how boring the Ryanair and easyJet bashing has become?

[ADC]

This is far from a Ryanair bashing session but evidence of the double standards that Ryanair have been applying for years.

The Ryanair business case survives on operating from secondary airports on 90% of their routes. They target airports that sit in the middle of nowhere, that are struggling to survive. They then hammer them for "zero charges" or "new route marketing assistance". So they start operating , paying very little for the privelage, while the airport in question has to find ways to pay for the additional staff/costs/facilities.

If the airport in question is impertinent enough to eventually suggest that Ryanair might want to actually PAY for some of these services, Ryanair threaten to pull out and start a campaign about how the airport is trying to ask the travelling public to pay "exorbitent" fares.

For years Ryanair has been bashing Dublin and Stansted about the cost of landing and handling charges, but the notion is that Ryanair want discounted charges JUST FOR THEMSELVES. The airports, (quite rightly) insist that Ryanair should pay their way , just like every other carrier.

Ever wonder why Ryanair tend to run some routes for just 12 months, then pull off again ?? Simple, The airport had the impertinence to ask to be paid.

So, lets level the playing field. Just as State Governments can't subsidise "National Airlines", neither should Local Government subsidise Low Cost Carriers.

ADC

[Engee73]

My apologies JW

When I saw this post, the posts between yours and the first two where missing for some reason.

It now makes a bit more sense.

:(

[Jet II]

ADC
The Ryanair business case survives on operating from secondary airports on 90% of their routes. They target airports that sit in the middle of nowhere, that are struggling to survive

But surely this is a win-win situation for all concerned. The local government/airport owner gain by the increase in economic activity and growth. Ryanair gain by getting more routes and growth for their operation.

I'm not quite sure what you are suggesting - should these regional airports be made to charge the same as the major hubs?, then there would be no incentive for ANY airline to use them or should they just be allowed to go bust with the knock-on effects for the local economy?.

Surely this is how capitalism works - local areas do whatever they can to give themselves some sort of competitive advantage.

[Flip Flop Flyer]

Doesn't matter if it's Easy, Ryan or Lufty. he rules applies equally to everyone. If a local government or airport supports an airline by offering reduced fares, or even subsidies, that amounts to unfair trading practice. Exactly the same way as a nationstate is not allowed to pump money into their flag carrier (ref present situation with OA).

So there you have it; if an airport is found to have offered Ryan, or Easy or whomever, rates that are considerably below the average, they stand to get clobbered and raise their prices. This might spell the end of the frantic growth of LCC's, as they would have to incorporate the additional charges in their ticket prices, with the inevitable fall in passenger numbers.

Indeed, there are similar situations around Europe. Malmoe (know to FR as Copenhagen East) are also under investigation. This is not Ryan bashing, if anything it is airport / authority bashing. I really don't know if the airports or airlines will be asked to pay a fine, but if found guilty someone will.

PS
Nice seeing you too Knold.

[Dewdrop]

Sorry the competitive marketplace should drive prices down. Ryanair hasn't raped any airport to the best of my knowledge, in fact most prosper. The only people who suffer are those that are overpriced and government owned. BAA's profits (currently) are down to the LCC, the industry needs them so lets stop bashing.

[ADC]

La Mezia

Rimini

for openers

[AJ]

Don't see what all the fuss is about given local/regional governments in many countries already offer 'special inducements' to electronic/chip/biotech companies to locate within certain areas...silicon glen, welsh development agency etc. etc.

Let's also bear in mind Ryanair are by no means the only airline receiving such (common) inducements/sweeteners....try buzz in Bergerac....apparently the airport/local goverment pays its ad budget, and that is in the millions of pounds...

As others have said, it actually benefits the local community....plane load of tourists arrive, and pour loads of money into the local economy, multiple times a day.

Let's move on to something more interesting......

[Zico]

Jet II and Rescue 3,

See where you´re coming from. Surely FR must be allowed to negotiate lower fees at far out unused airports. Can´t be just that fees at ("Frankfurt") Hahn should be raised to the levels of Frankfurt Main.
But, and this is where things get out of hand.......at an airport like ESOW, Vaesteras, near...well sort of, Stockholm....there already is a socalled major operating. SAS is, according to media here paying a handling fee of 110 Swedish Kr per pax, whereas Ryan Air is paying 10 Skr for the same service.......!
And there are others.
Taxpayers (ESOW is owned by local counsils) money subsidise FR, to the disadvantage of the competition!

Hope the EU will investigate in depth this time!