French MP wants an investigation over Ryanair’s subsidies
I’ve been waiting a bit to treat this topic. Firstly because it is complex, and secondly, because I wanted to see Ryanair’s answer to Air France’s complaint. Moreover, a new development pushed me to write, that about a French MP who asked for a special report at the National French Assembly.
Yesterday, the French MP, Odile Saugues, of the left-wing party (PS) asked for a special information investigation on Ryanair’s subsidies. This demand came after Air France filed a complaint against Ryanair to the European Commission. The national carrier revealed that Ryanair had probably received €35M in public money back in 2008. Air France also did an estimation that showed that Ryanair had probably earned €660M subsidies from all over Europe in 2008. Although these figures need to be confirmed, they aren’t impossible. I spent time trying to compile data from across Europe, but am still working on sticking all the pieces together. Actually, it’s really hard to obtain precise data, as these subsidies are not declared by European airports and it’s not in Ryanair’s habits to make public either. However,oOthers figures have also surfaced in the press. A French aviation journalist from Les Echos, estimated that Ryanair most probably received €495M from across Europe. In any case, all these hypotheses and estimations are superior to what Ryanair posted as profit in FY08. Indeed Ryanair posted a €481M profit; which would be that Ryanair would have losses of €179M or €165M.
French opinion reacted in two ways: shock on one hand at learning that a private company that advocates deregulation and liberalisms is, at the same time, a company that only survives thanks to public money. On the other hand, claims that Air France, and others flag carriers are also receiving an important amount of public money. Michael O’Leary underlined this fact in a special interview recently published in La Tribune.
Playing with words, an Irish national sport?
Ryanair won this part of the war of words with its French competitor. Indeed, the Irish airline succeeded in changing the subject of the debate… But I have to remind us that Air France is not complaining about the fact that Ryanair receives subsidies, but about the fact that those it perceives are illegal. Indeed, most airlines receive subsidies, Air France also receives some, but legally… There is a huge difference between both airlines!
Rules are rules
To receive public money on a legal basis, there are three conditions. If one of them is not respected, then the subsidies move into an illegal agreement that mainly create unfair competition. These three conditions are:
- The company has to declare all public aids to the European Commission. It’s a fact that Ryanair and its partners have never declared any of their grants. All the regional chamber reports point this out.
- Subsidies have to be strictly limited to 3 years (5 years in special cases). Once more, Ryanair’s practices are illegal. The first contract between the French regional airport and Ryanair was signed at the end of the 90’s. Ryanair has been operating out of Beauvais since 1997, which simply means that Ryanair’s been “subsidized” for 13 years now!
- Lastly, subsidies have to be regressive, which means that each year, the amount has to be significantly lower than the previous one. Here again, is a rule that Ryanair (and its parterns) has never respected.
For all of these reasons, a French MP has asked for a serious investigation on Ryanair’s pratices. She declared that it is now time to think from a European point of view. She also called “for clear and secure legal aid condition for regional airports” and condemned Ryanair “social dumping”. Her demand has now to be approved by the European Commission of the French Assembly, but the European low cost airline market might soon face serious changes.
Hey !
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And I thank you for sharing this
Thanks