Ryanair is finalising its appeal against the European Commission's state aid ruling and will join fellow no-frills airlines to contest other passenger compensation laws.

The Dublin-based carrier last week received a copy of the full EC judgement on illegal local government subsidies given by Brussels Charleroi airport to attract air services and it plans to lodge its formal appeal by the end of May. Jim Callaghan, Ryanair head of regulatory affairs, says the cornerstone of its appeal will be the Commission's application of the market economy investor principle (MEIP) in declaring a quarter of the subsidies Charleroi gave to Ryanair to be illegal. The essence of the MEIP is that, under European Union competition rules, when a public authority invests in an enterprise under conditions that would be acceptable to a private investor, the investment is not a state aid. Callaghan says the EC failed to take this principle into account when looking at Charleroi, which reported a small operating profit last year. "The EC has to ensure that public airports be allowed to compete with their private counterparts on a level footing," says Callaghan.

The airline is simultaneously leading the European Low Fares Airlines Association (ELFAA) in lodging its complaints on the recently passed denied boarding rules to the Court of First Instance in April. ELFAA is basing its appeal on two points: the absence of any link in compensation levels to the fare paid; and the failure to take third- party delays into account. Callaghan says if this early appeal fails to reverse the legislation, Ryanair predicts law suits "from every disgruntled passenger", which would have to be challenged on a one-by-one basis until case law proves the regulations unworkable.

Meanwhile, the International Air Transport Association (IATA) is considering a legal challenge to the denied boarding compensation rules. "This is not a piece of legislation we can live with...We are looking for the most appropriate venue for a challenge,"says IATA.


Source: Flight International