Ryanair have up to 20 ‘sweetheart deals’

RYANAIR has up to 20 “sweetheart deals” with publicly owned airports across Europe, similar to the deal which has been ruled illegal by a French Court.

The company reacted with dismay yesterday after a French court refused the airline a stay on an earlier ruling that branded as illegal a ‘sweetheart’ deal in which the Strasbourg Chamber of Commerce gave Ryanair a €1.4 million subsidy.

Two other challenges against similar Ryanair arrangements are pending.

Ryanair has now suspended its Strasbourg flights via London. Ryanair’s sweetheart deals with publicly owned airports extend across Europe, especially in France and Italy. Air France and other traditional airlines are now expected to use the ruling to try to oust Ryanair from more airports and to stop it gaining a foothold at others.

However, industry analysts believe even if Ryanair were to lose all three pending cases, it will still not herald the end of low fares.

“The deals Ryanair makes with airports represents less than 20% of their cost base,” said John Mattimoe, air transport analyst with Merrion Stockbrokers in Dublin. “They make lots of other savings which they pass on to their customers so even if they lose these cases, it would not mean the end of low fares.”

Fellow analyst Shane Matthews of NCB stockbrokers agrees. “There is a privatisation of airports going on throughout the EU anyway and that will give Ryanair even more options. They have the flexibility to move base if conditions become unfavourable.”

Ryanair’s Head of Regulatory Affairs, Jim Callaghan, said: “We will now have to suspend the Strasbourg route pending the outcome of the appeal, which could take over a year to be heard. In the meantime, French consumers and visitors to the Alsace region will suffer. Strasbourg Airport will decline with the loss of 200,000 passengers delivered by Ryanair.”