Ryanair to axe Marseille base in row over staff tax payments
Published 14/10/2010 | 05:00
RYANAIR will close its Marseille base in January and axe more than half the routes it operates to the city's airport as the airline comes under increasing pressure from French authorities to make 120 of its pilots and cabin crew based there pay French taxes.
The low-cost carrier has increasingly played hardball with airports and local authorities that don't cave into its demands, and has previously pulled the plug on bases following disputes.
The airline's chief executive, Michael O'Leary, who was in Marseille yesterday, said French authorities had embarked on "ill-judged legal action".
"These are not French jobs, but rather Irish jobs on Irish aircraft, which are defined by EU regulations as Irish territory," he said.
"All of these people pay their tax and social insurance in Ireland, in accordance with EU regulations, and they remain fully tax compliant."
French prosecutors have decided to proceed with a case against the airline, claiming that it is engaging in illegal work practices. Mr O'Leary first threatened last May to close the Marseille base if prosecutors in the Aix-en-Provence region pursued the case.
Rival EasyJet was fined €1.65m earlier this year for engaging in a similar practice to Ryanair's at Paris Orly Airport. Its 170 staff there were employed on British labour contracts. EasyJet stopped the practice in 2007.
Ryanair opened the Marseille base in late 2006 with 13 routes and two aircraft, and now has four aircraft there. All of its routes to other destinations in France, including Paris, Brest, Lille, Tours and Nantes, will be cut from January. The four planes will be flying from other airports in Spain, Italy and Lithuania.
Despite the changes, Mr O'Leary said Ryanair remains committed to Marseille. "Ryanair will now be working with the management of Marseille Airport to try to grow other routes and traffic, on aircraft that are based overseas."
He reiterated calls for the Irish Government to auction off Cork and Shannon airports and sell the two terminals at Dublin Airport, claiming the move would enable the Dublin Airport Authority (DAA) to pay off "most" of its debt.
His comments came as more British airports look set to be sold after an appeals court yesterday reinstated an order for the British Airports Authority (BAA) to sell London's Stansted Airport and either Edinburgh or Glasgow airports in Scotland within two years. BAA offloaded Gatwick Airport this time last year to a US investment group, Global Infrastructure Partners (GIP), for £1.5bn (€1.7bn).
GIP also owns a 75pc stake in London City Airport, which it acquired from Irish financier Dermot Desmond in 2006.
Ryanair had previously been mooted as a potential buyer of Stansted, its biggest base, but those suggestions were dismissed back in 2008 and again yesterday by the airline, which said operating airports "is not the business we're in".
Mr O'Leary said: "The way forward has been shown by the Competition Commission in the UK. We must break up the DAA monopoly, and allow competition between airports and between terminals to deliver lower costs and better passenger service."