Ryanair wins 'hangar' case in London

An aircraft maintenance company sued by Ryanair must use its "best endeavours" to secure long-term hangar space at Dublin airport for the airline, the High Court in London ruled yesterday.

In a damning 40-page judgment against SR Technics and for Ryanair, Mr Justice Gray found the company had not acted in good faith in implementing an agreement between the airline and the maintenance company.

The Dublin Airport Authority (DAA) faces legal action if it "unreasonably" withholds permission, the court ruled. The judge was scathing about the evidence given by witnesses from both SR Technics and the DAA.

During the trial Ryanair accused both the company and the authority of colluding against it in denying it hangar space and in favour of Aer Lingus.

The judge also awarded not just costs, estimated at £200,000, but ordered that two-thirds of the estimated amount be paid on account.

Under the terms of the judgment Ryanair - which was faced with vacating the maintenance hangar it rents from SR Technics (SRT) by the first week of January - is not only entitled to stay on, but its landlord must seek to secure its accommodation there for the next 15 years.

The airline's lawyers had sought a common law contract remedy of "specific performance" of a contract rather than monetary damages.

Mr Justice Gray said that after hearing the evidence and reviewing side letters, there did exist a collateral agreement between the maintenance company and the airline.

The ruling is a significant victory for Ryanair, which said hangar space was central to agreeing to move its maintenance operation from Stansted to Dublin - to SR Technics - seven years ago.

The company in the meantime did not renew its maintenance contract with SR Technics, but did pursue it to honour its hangar space agreement.

The ruling follows a trial that took twice as long as originally intended and in it Mr Justice Gray rebuked the maintenance company, which had "failed lamentably to comply with its disclosure obligations".

The judge was unable to disagree with counsel for Ryanair, Hannah Brown, who said delays had been caused by the "lying" and "collusion" between SRT and the DAA. The retiring judge said he saw much force in her claim.

He said he was not attempting to direct SRT as to how they should seek the licence or tenancy for Ryanair, but simply that the company should - as a tenant in good standing - seek to use its best endeavours as it clearly had originally undertaken to do so.

Ryanair's Michael O'Leary last night seized upon the criticisms of DAA and SRT's disclosure of evidence of what he called, "proof of the low standards of honesty and probity that apply to both companies".

"The DAA repeatedly abuses its monopoly power at Dublin airport and is permitted to do so by the Department of Transport," he said.