Airport chief flies to defence of Ryanair deal

Date: 25/11/04

By Peter Chapman

DENMARK'S Esbjerg regional airport has hit back at claims that it is dipping into taxpayers' money to give Irish budget airline Ryanair a cut-price deal for basing its operations there.

The European Commission has asked for details of the package that managers at the coastal airport, owned by regional authorities, offered to Ryanair boss Michael O'Leary, following reports that the charges were below normal rates approved by the national government.

Ryanair allegedly paid taxes of 5.10 euros per passenger - far lower than supposed 'official rates' of 20.70 euros.

But Peter Bay, the airport's director, said that the low-price offering was above board because it took into account the relatively low costs per passenger of handling Ryanair's 737 jets.

He said that critics, including liberal MEP Karin Riis Joergensen, “seem to have the impression that we are spending taxpayers' money on 'sponsoring' Ryanair”.

“This is not the case. We earn a contribution on Ryanair's route. If this was not the case, we would never have accepted the contract,” he added.

Bay admitted, however, that the airport bosses do not charge Ryanair the official rate. “We have calculated the costs that Ryanair causes at our airport.

“What we charge are the actual costs plus a contribution [to our overheads]. This principle means that our charges are transparent and non-discriminating - in accordance with the recommendations of the International Civil Aviation Organization (ICAO).”

Loyola de Palacio, when European commissioner for transport, had said that the EU executive intends “to take this matter up with the Danish authorities to determine if there are any possible state-aid implications in this arrangement”.

She warned that the consultation “will be carried out in the context of the ongoing examination of these types of arrangements following the Commission decision concerning the [Belgian] Walloon Region, Brussels South Charleroi Airport and Ryanair”.

But Bay said that the Commission would not find any evidence that the EU's state-aid rules have been broken.

He explained that Danish airports, including Esbjerg, have a tradition of charging a certain amount per departing passenger and a certain amount per departing tonne of aircraft.

“As you can imagine, we spend relatively - ie per passenger - less resources on handling a large aircraft than on handling a small one.

“So, by charging the fixed rate per departing passenger, the large aircraft will pay far more than the related costs can justify, and the small aircraft will hardly - or not at all - cover the costs.

“This is discrimination, as I see it.”

Bay told European Voice that legal experts had advised that airports are free under Danish law to charge airlines what they see fit - though the transport minister is allowed to stipulate a formula on how fees are calculated and presented.

“However, he has not done this and, consequently, we have no rules,” said the Esbjerg chief.

The Esbjerg air-traffic deal is the latest to come under scrutiny following the Commission's ruling on state subsidies from the region of Wallonia to induce Ryanair to operate its European hub at Charleroi airport, 40 kilometres south of Brussels.

A spokesman for the Commission said that the investigations were still in an “informal” phase.

A Ryanair spokeswoman declined to comment.

Denmark's Esbjerg regional airport responded to allegations that it was using taxpayers' money to give the Irish budget airline Ryanair a cut-price deal for basing its operations there. Peter Bay, the airport's director, said that the low-price offering was legal because it took into account the relatively low costs per passenger of handling Ryanair's 737 jets. The European Commission had asked for details of the package that managers at the coastal airport, owned by regional authorities, offered to Ryanair boss Michael O'Leary, following reports that the charges were below normal rates approved by the national government. Ryanair allegedly paid taxes of €5.10 per passenger - far lower than supposed 'official rates' of €20.70.