German proposals for 16% VAT on ticket sales may hinder Ryanair
Merrion stockbrokers analyst John Mattimoe said the proposed tax is a negative for all airline operators but is likely to meet with resistance across Europe.
He said: “It is difficult to see Germany having much success with any such a unilateral move.
“For low-cost carriers such as Ryanair, if a tax is to be introduced it is better that it is percentage tax rather than a flat tax, which could penalise them unfairly.”
Meanwhile, Ryanair chief Michael O’Leary yesterday defended the cut-price deal the firm gets from its airport hub in Belgium and said he was convinced it did not break EU rules.
The EC says Ryanair has been given tax breaks, the use of an aircraft hanger and almost €3 million in what could be illegal state aid from the Walloon government in Belgium.
The commission has been investigating complaints that the deal amounts to state aid since December and a spokesperson yesterday said they do not expect to reach a conclusion for months.
The investigation into Charleroi airport has major implications and could be extended to other airports used by Ryanair.
Mr O’Leary said Ryanair can prove the Charleroi deal does not break EU rules on competition and state aid.
He delivered a file of documents to the EC yesterday to prove Charleroi was in competition with other airports when bidding for Ryanair’s business.
Charleroi had also offered similar deals to other airlines to attract business, he said.
“All this takes the case out of the state aid position and we are extremely confident Charleroi will be cleared by the commission,” said Mr O’Leary.
A spokesperson for Transport Commissioner Loyola de Palacio said she had a good meeting with Mr O’Leary.
“She is aware of Ryanair and sees them as one of the positive results of the liberalising of air transport by the EU but we have to make sure the rules on state aid are not being breached,” the spokesperson said.
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