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Low-cost flights not in danger from EU ruling
February 4, 2004 12:00 AM
Fears are misplaced that low-cost flights or airports like Luton or Stansted are in danger, following the European Commission competition policy ruling that budget airline Ryanair should repay £3 million in illegal taxpayer subsidies.
London's Lib Dem Euro-MP Sarah Ludford says the excessive nature of Ryanair's deal with Charleroi airport in Belgium is by no means typical of the whole industry:
"This case deals with Ryanair and its arrangements with one particular airport in Belgium. Other airlines such as BMI Baby and Easyjet are able to offer cheap deals from many airports in the UK and abroad, without being so reliant on subsidised landing fees".
"EU law allows for some degree of subsidy in promoting new flight destinations and smaller airports, but the Commission is right to act when airlines get greedy and overstep the mark by demanding deals that distort the whole market. And don't let's forget taxpayers fund these deals!"
The Commission decided that Ryanair could keep some of the subsidies it had received, but had to hand back those relating to eg preferential rates for ground handling fees and hotel accommodation not available to other airlines. It is estimated that the withdrawal of Ryanair's unjustified subsidies may amount to a maximum of £5 on its ticket prices.
Note:
Easyjet has said the Commission decision was 'supportive' of the low-cost airline industry (Financial Times, February 4th 2004)
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