Brussels, 27/06/2012 (Agence Europe) - The economic model of the low-cost airline Ryanair is unable to stay the course, according to major European airlines. Without subsidies in various forms from the regions and airports, the Irish company would record losses of €305 million, according to the calculations of the Association of European Airlines (AEA), in an internal study.
The analysis of the accounts was leaked to the Belgian daily newspaper L'Écho, on Tuesday 26 June. However, the AEA stands by its figures: €793.1 million in public aid must be deducted from Ryanair's turnover of €488.2 million. The subsidies, the association argues, make the low-cost brand a giant with feet of clay. The AEA, which represents 33 European airlines, has ruled out launching a campaign against Ryanair, but would like to start a more specific reflection on competition within the aviation sector. Against a backdrop of multiple restructuring operations among traditional airlines, such as Air France, the AEA has drawn some conclusions: even an economic model such as that of Ryanair is not profitable, a source within the organisation told Agence Europe, adding that competition should operate on a level playing field and that to this end, the Commission should review its policy on state aid within the aviation sector.
When questioned on the subject, Ryanair's boss appeared unruffled: “Have we negotiated tax cuts? Yes. This is something all major companies do”, he told L'Écho, whilst maintaining that his company had “never received subsidies from the public authorities. In 2004, the European Commission made us pay back tax cuts we were granted by Charleroi airport, taking the view that these constituted subsidies. However, the Court of First Instance of the European Communities ruled against it.” In any case, the expansion of the low-cost airline does not seem to be running out of steam, as it is believed to be considering buying its Irish rival, Aer Lingus. (MD/transl.fl)