Business Irish

Sunday 21 October 2018

O'Leary fears political clout will win

Budget airline Ryanair chief Michael O'Leary says the heavyweight lobbying of the major airlines and airports of Europe may sway the decision against him in Brussels on Charleroi aids

THE EU ruling against Ryanair's deal at Charleroi will be motivated by politics, not the law, claimed the airline's chief executive, Michael O'Leary, yesterday.

He accused the big guns of aviation in Europe - the large carriers and hub airports - of lobbying not just the European Commission, but also their national governments to ensure his airline gets "rogered".

He was speaking before yet another packed press conference in Brussels, where journalists representing both EU and local Belgian media have become accustomed by now to his bombastic style. He last spoke in Brussels two weeks ago.

Arriving by Ryanir's own 'red eye' flight from Dublin after earlier travelling from his Mullingar home in his private taxi, Mr O'Leary said that if Ryanair loses the case over state aid at its first continental base at Charleroi, it would, as a last resort, pull out completely.

But the Ryanair boss conceded that through a mixture of media reports and some hints from the Commission, he now anticipates a ruling that is not just superficially negative, but cuts right to the heart of his low-cost deal with the Walloon regional government.

Frustrated at the way the same questions were being posed, he told one reporter that in Ireland there is a saying: "If your aunt had balls, she would be your uncle."

In an interview after the press conference, Mr O'Leary told the Irish Independent that he was "bloody rattled", and now just wants to get the facts of the Commission's decision made public so he can work out the impact on the airline's business strategy.

Although the ruling won't affect its Irish or British bases, around 18pc of all its passengers fly from airports with deals like Charleroi - though it's the only hub affected.

"You really have to take a very political decision in this case to find against the low cost base at Charleroi. The airport is now profitable; two million consumers are saving a fortune a year," he said, pointing out that traffic on the 12 equivalent routes served from the main Brussels airport had also increased, through greater fare competition.

Afterwards, Mr O'Leary and his team met the Irish EU Commissioner, David Byrne, though they couldn't arrange to see the Transport Commissioner Loyola de Palacio. Mr O'Leary said this was not a snub, but his own fault because he requested it at 24 hours' notice.

"We had expected a negative decision on the Mickey Mouse stuff, like hotel accommodation, and that we might have to pay it back or change the 15-year contract," he admitted.

"The real crunch issue is that Brussels Charleroi cannot have the benefit of the private market investor principle, which to us is bizarre. If that's the case, then what the Commission is saying is that the long-term, low-cost landing charges and handling charges are gone."

Comparing the air market with shopping centres, he said it was perfectly normal for anchor tenants to secure the best deal they could, with smaller shops left with less attractive rates.

"There's a possibility here they may just make a fundamental mistake. They're under intense pressure from all the high-fares airlines and airports that have been lobbying like mad. It's their only chance to knock back the only real low-fares airline in Europe," he claimed.

However, Ms De Palacio has a well-earned reputation as a steely operator, who is not easily pushed around by anyone, so did Mr O'Leary think she can withstand the alleged pressure?

"I suspect so, having met the woman - but you're talking about a lot of the dark forces here. If you array the influence of the major airports, the major airlines, the influence is felt not just here in Brussels but within their own governments. There's an enormous amount of spinning going on here," he claimed, not spotting the irony in his own behaviour. "There are lots of people out there who want to see us rogered," he said, pointing out that an appeal to the European Court of Justice would be his first move, before a possible pullout from the base, which is around 40km from Brussels.

Citing former EU Commissioner Peter Sutherland's achievement, he claimed that deregulating the internal EU aviation industry was one of the very few successes the EU could point to.

"Here we are, looking down the barrel towards reverting 20 years' progress on that.

"Of course I'm bloody rattled. How is it that state aid rules designed to prevent the French government giving Air France billions can now be used by Air France in Strasbourg to block Ryanair offering competition?" he asked.

The outcome could result in the loss of at least 200 jobs at Charleroi Airport, in a city with high unemployment. Ryanair claims the airport is about to turn a profit for the first time ever and has grown from about 20,000 passengers per year to 2m this year.

It has done so at the price of slashing its official landing and handling fees to attract Ryanair to it.

"We do have two other airports which will take these aircraft tomorrow. You either tell publicly-owned airports you can't offer a discount and can't compete at all, or they privatise themselves."

One possible reaction to a negative ruling would be to trigger a "revolution" with a large number of publicly-held airports being sold to private investors, he said.

However, he scoffed at the idea of buying the airport personally, suggesting this is something the local community might consider doing instead.

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