Ryanair seeks judicial review

RYANAIR will be applying within weeks to the High Court for a judicial review of what it calls the Department of Transport’s order to the aviation regulator to increase passenger prices at Dublin Airport by 40% next year.

And Michael O’Leary has reiterated his calls for the office of the Aviation Regulator to be closed down on the grounds that “it now serves no useful purpose“.

He added that if the office has no statutory independence anymore, then it has no role to play. Ryanair has called for the regulator to be subsumed into the Department of Transport to bring about annual savings of about €5 million. However, the airline has called also for the winding up of the Department of Transport.

Mr O’Leary said the judicial review application would be an attempt “to expose the corruption of the Department of Transport”, adding, “I think the courts will side with us. The alternative is to roll over and accept our fate.”

That fate could be a €40m hit to Ryanair costs next year on the back of state attempts to recoup the cost of building the second terminal at Dublin Airport. The airline has also renewed its calls for the break-up of the Dublin Airport Authority (DAA), the selling off of Cork and Shannon airports, the scrapping of the tourism tax, the ‘mothballing’ of Terminal 2 and the lowering of existing airport charges.

Transport Minister Noel Dempsey instructed Aviation Regulator Cathal Guiomard, in a recent letter, to ensure the DAA’s financial viability is protected, something which is likely to result in increased passenger prices.

In a terse response to Ryanair’s latest call, the Department of Transport said it respects the airline’s right to disagree with Government policies. However, it said: “We fundamentally reject Mr O’Leary’s characterisation of the department and its officials as corrupt, by virtue of their implementation of these policies. We will not lend dignity to the accusation by making any further comment on it.”

The DAA has, however, rejected some of Ryanair’s claims, saying it is “utterly untrue” that Terminal 2 will cost €1.3bn as Ryanair has said and it will cost just over €600m. The authority has also dismissed the airline’s claims that there was no consultation over the terminal plans, saying there was “a vast amount” of consultation over the project.

Meanwhile, Mr O’Leary said it is now “highly unlikely” Ryanair will be doing a deal for new aircraft with Boeing, as no agreement is likely to happen before the end of this month.

The airline had already said it would consider cancelling its fleet expansion plans over unresolved cost negotiations with the manufacturer and pass on the unused funds to shareholders. Mr O’Leary said the latter could take place in mid-to-late 2011.