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Sat, Jul 14, 2007

Ryanair Files Suit Against European Commission

Carrier Says EU Failed To Investigate State Aid Complaints

Ryanair, Europe's largest low-fare airline, announced it will sue the European Commission in the European Courts for failure to take action on a number of state aid complaints involving Air France, Lufthansa, Alitalia and Olympic Airways, which were submitted to the Commission more than a year ago. 

These complaints involved hundreds of millions of dollars in illegal state aid being granted by the French, German, Italian and Greek governments to subsidize their flag carrier airlines. Although Ryanair has called on the Commission several times to investigate these claims, the Commission has failed to do so, said the carrier.

"This is another example of the Commission's twin track approach to state aid. On one hand they refuse to take action against serious violations of the state aid rules by national governments to protect their flag carrier airlines like Air France, Lufthansa, Alitalia and Olympic, while at the same time they launch bogus investigations against small regional and secondary airports like Charleroi. The foolishness of the Commission's Charleroi decision is that Ryanair now actually has a lower cost base in Charleroi," said Ryanair's Head of Regulatory Affairs, Jim Callaghan.

Callaghan alleges the Commission has failed to take any action against what he calls "blatant abuses" of the state aid rules, including the French Government's discounting of domestic airport fees as it pursues Malta for a similar discounting of its domestic airport charges. Government aid to airports and airlines is also under scrutiny.

As ANN reported, the EU ruled in June to prohibit Ryanair from taking over Aer Lingus. Neelie Kroes, European Commissioner for Competition Policy, told reporters at a press conference such a deal would have limited competition as the combined airlines would have controlled more than 80 percent of all European flights to and from the Dublin Airport.

Kroes said the decision was made to "safeguard consumers" and the Commission "does not prohibit takeovers lightly." Ryanair owns 25 percent of Aer Lingus.

"It appears as always that the Commission applies one rule for the high fare flag carrier airlines and state owned primary airports, but a different one for low cost airlines like Ryanair and the numerous regional and secondary airports that are offering competition and lower fares to the traveling public," said Callaghan.

"The European Commission is more concerned with protecting inefficient flag carrier airlines and hub airports than it is with actually promoting competition and the consumer interest."

"Ryanair is left with no alternative but to challenge the Commission's failure to investigate these unlawful state aid abuses in the European Courts. Ryanair is confident that the European Court will take the Commission to task for their failure to fairly enforce the state aid rules against national governments who continue to protect their inefficient flag carrier airlines," Callaghan continued.

"It is time that the European Commission stops this twin track approach to enforcing the state aid rules. The same rules should be fairly applied to all airlines, and an end put to the unlawful state aid to the flag carriers".

FMI: www.ryanair.com, www.europa.eu

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