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European commision to investigate Ryanair/Charleroi

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European commision to investigate Ryanair/Charleroi

Old 17th Dec 2001, 15:29
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Post European commision to investigate Ryanair/Charleroi

Quoted out of yesterdays Observer..

The Belgian authorities agreed to pay Ryanair more than 1.5 million to fly to Brussels as part of a deal being investigated by the European Commission.
The Observer last week revealed that the commission was looking into possible breaches of European Union competition and state aid rules in the low-cost airline's contract with Charleroi Airport, near the Belgian capital.

Michael O'Leary, Ryanair's chief executive, insisted yesterday there was nothing improper about the deal with Charleroi, which is part-owned by the Walloon regional authority.

According to documents seen by this newspaper, the contract offered Ryanair the following inducements:

€160,000 (99,000) for each of the first 12 routes Ryanair opens from Charleroi. Since the contract took effect last April, it has already launched flights to six new cities.

€768,000 (476,000) to subsidise recruitment and training of pilots and cabin crew.

Cheap landing tax of €1 (62p) per passenger, rising to only €1.13 (70p) in 2006 and €1.30 (80p) in 2010.

Free offices.

Up to €250,000 (155,000) towards Ryanair's hotel and subsistence costs while it set up its Charleroi office.

The airline is developing the airport as its first continental hub, serving mainly British and Irish destinations, and hopes to carry a million passengers a year from Charleroi. Ryanair has based its low-cost business on flying to obscure airports, where landing fees are lower. Charleroi is further from Brussels than Zaventem, the city's principal airport.

The EC's transport directorate is conducting the inquiry into Ryanair's deal with Charleroi. O'Leary yesterday refused to discuss the details of the contract, but said free office space and incentives to open new routes were 'not at all unusual' in agreements between airlines and lesser-known airports.

'We have better deals at other airports,' he added.

O'Leary denied that the Charleroi deal broke either state aid or competition rules. He said: 'There isn't going to be anything to investigate... The package that we negotiated is available to anyone.

'We are entirely happy with the EC's investigation. And we are entirely confident that when the EC finishes it, there won't be any requirement to increase costs or airfares at Brussels Charleroi.

'The Walloon government has said that any airline wanting to fly there would be offered similar terms.'
[ 17 December 2001: Message edited by: Brenoch ]
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Old 17th Dec 2001, 15:32
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If they are beeing paid 476,000 to recruit pilots, you would have thought they could process your application for free..
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Old 17th Dec 2001, 17:20
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fish

One might wonder why Ryan was the obvious choice of this ultra-liberal offer?
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Old 17th Dec 2001, 17:35
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Simple. Until FR came along, Charleroi was a freighter airport. FR has been good for the local economy.
 
Old 17th Dec 2001, 17:40
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Apparently, it has caused some sort of grief at Virgin Express and DAT.. Not sure wether they filed a complaint or not though..
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Old 17th Dec 2001, 19:06
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In spite of the last sentences in the authors post, I doubt that all applicants will receive this deal though...I mean they virtually operate in dreamland with free offices, cheep as$ landing fees, paid for hotels and so on...

While one country buys it self a new "flag carrier" former Swedish defence minister today said in a major newspaper that SAS, the flag carrier in Scandinavia owned mostly by respective governments, should be put to sleep...

[ 17 December 2001: Message edited by: Knold ]
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