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Friday 1 August 2014

Airport in legal action against Ryanair over alleged debt

Colm Kelpie

Published 11/03/2013|04:00

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Ryanair CEO Michael O'Leary

BUDAPEST International Airport has initiated legal action against Ryanair, the Irish Independent has learned.

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An application was lodged with the High Court in Dublin last month with the Hungarian airport seeking summary judgment, which means it wants the court to order the repayment of an alleged debt owed by the airline.

This is the first stage in the legal process and Ryanair can either consent to or challenge the judgment.

The no-frills carrier and the airport have been involved in a spat over airport charges, with Ryanair announcing in November that it was axing 10 routes at its Budapest base as the airport became the latest to be pilloried by the airline over charges.

The carrier said that its decision, which came into effect in January, would lead to the loss of 800,000 passengers a year and 800 on-site jobs.

In a statement, Ryanair accused the airport of refusing to provide efficient facilities and offering a competitive cost base for future growth.

Chief executive Michael O'Leary said at the time that he regretted the cuts but claimed they could be reversed if there was an improvement in the facilities at Budapest.

The precise nature of the legal action is not known as Budapest Airport, which is being represented by Arthur Cox solicitors, would not comment. A spokesman said it did not want to comment on "ongoing court cases", while Ryanair also declined to say anything.

It is understood that the airline is considering its options and it is likely that it will initially challenge the jurisdiction of the Irish courts as the carrier would prefer to have the case heard in Hungary.

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It isn't clear why the airport sought to take its case to the Irish authorities, although the airline is registered in Ireland and its employees across Europe are on Irish contracts.

German company Hochtief and other investors bought a majority stake in Budapest Airport in 2007, but it was robbed of a large chunk of its traffic with the collapse of the Hungarian airline Malev in February of last year.

In the wake of the collapse, Ryanair announced new routes to and from Budapest. But when it pulled some of those routes in November, Mr O'Leary accused Hochtief of failing to agree a long-term growth deal with the carrier and claimed it had no interest in growing Hungarian tourism, traffic and jobs as "it repeatedly increased charges even as its traffic declines".

At the time, a spokesman for Budapest Airport stated that landing fees were near average for the region, but the Ryanair move was seen as a blow to the airport as it sought to recover from the demise of Malev.

Ryanair also cancelled flights at the airport in March of last year amid rules imposed by border-control police at Budapest Airport affecting the airline's pilots and crew.

Irish Independent

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