EU rule change ‘would close most of our airports’

Most of Ireland’s airports would be closed down if new rules being devised by the EU come into force, Ryanair chief executive Michael O’Leary warned.

Mr O’Leary is at war with the European Commission over plans to change the guidelines on funding airports. The commission has 49 open cases, many involving airports Ryanair uses.

He came face to face with Gert-Jan Koopman, deputy-director of the commission’s competition directorate, and the person responsible for many of these state-aid cases at a conference in Brussels.

The senior official said they are revising the guidelines for airports and want to wean the sector off state aid gradually and make sure that regions that legitimately need to develop airports can do so. If state aid is involved, there must be market demand for it.

Airports with less than 200,000 passengers a year are exempt from many of the regulations and would be open to extending the exemptions but under strict conditions.

But many were being built as an expression of national pride and such arguments were not rational and were a waste of economic and public resources. “Such vanity projects are soaking up public investment,” Mr Koopman said.

There was also a problem with airports that were working below their maximum capacity. He believed that airlines must pay their share of the operating costs where there is underused capacity and eliminate the need for state aid.

“These ideas make good economic sense,” Mr Koopman told the conference on New Developments in EU State Aid Law. “We suggest that some small increase in the landing charges this would entail would hardly put an airline out of business and would avoid a waste of resources.”

Mr O’Leary said the current MIIP rules provide the correct framework for a healthy industry but accused the commission of changing the guidelines to suit state-owned airlines and main airports.

“Eight out of 10 airports could be described as ‘vanity airports’ under the commission definition.

“Under their proposed guidelines 10 of the 11 Irish airports would be closed. Knock and Kerry can only survive with some government support. Shannon is declining. They don’t make sense…

“These guidelines do not allow for an adapting and evolving economy which Europe needs to grow. Leave it to the airlines and the airports to fight about the costs and the consumer will benefit,” he said.

He said Ryanair would ignore the guidelines. “We will just keep going.”

Meanwhile, passenger numbers at Ryanair grew by 5% on a year-on-year basis in May to 7.51m, the airline said yesterday. Load factor fell 1% on an annualised basis to 81%.