Madam, - I hope you will allow me to correct the errors in David Smith's letter of February 10th concerning the EU ruling on Ryanair's cost base at Charleroi.
Firstly, Ryanair has not received any subsidies or payments from the Belgian Government. What "we received" were significant discounts from high published charges at the airport - which nobody was paying anyway since nobody flew to Charleroi before Ryanair started flying there five years ago.
A discount is not a subsidy. It is common practice in most industries, where companies such as Ryanair (or Tesco, for example, in the supermarket industry) use their purchasing power (or develop entirely new businesses at empty airports such as Charleroi) to negotiate large discounts and pass these on to consumers in the form of lower fares. Contrary to Mr Smith's inaccurate view, the Commission's decision will have only two effects:
1. It will cause the lowest air fares in Europe to rise, as well as potentially causing costs and airfares at all publicly owned airports to increase as well to the disadvantage of the travelling public.
The EU Commission confirmed this in announcing the decision last week, when it confirmed that it believed prices would rise by between €6 and €8 per ticket.
In the case of Ryanair's lowest priced tickets this would more than double the cost to those lower-income passengers who can afford it least.
2. This decision places restrictions on the ability of publicly owned airports such as Charleroi to offer discounts and marketing support agreements in order to win new routes or new flights because they will now be unable to compete with privately owned airports such as Stansted, Prestwick, Luton, etc. which will not suffer these restrictions.
This is an unwarranted interference by the European Commission in the successful operation of the free market. Charleroi was empty five years ago; today it has over 2 million passengers a year and it is profitable (yes, it more than covers its costs) out of the payments that Ryanair makes to it.
In turn, Ryanair has reduced the cost of flights from Dublin to Brussels to less than €40. Five years ago, when Aer Lingus had a monopoly on the route, all passengers without exception were obliged to pay over £600 if they did not stay a Saturday night.
This decision benefits only the high-cost airports and the high-fare airlines, which is why they have all welcomed it. It damages the interests of consumers, and it damages the interests of public airports to compete on a level playing-field with private airports.
We remain confident that the European Court of Justice will overturn this decision on appeal and place the interests of ordinary consumers and under-used secondary and regional airports above the interests of high-cost airports and high-fare airlines. - Yours, etc.,
PAUL FITZSIMMONS, Head of Communications, Ryanair, Dublin Airport.