Irish low-cost carrier Ryanair has filed a complaint with the European Commission and French civil courts against Air France/KLM in response to the latter’s decision to take legal action against Marseilles airport’s new low-cost terminal, and soon-to-be Ryanair base.
Air France alleges that the differential between the €1.20 per passenger charge at the new terminal and the €6 at the main terminal is discriminatory. Ryanair is accusing Air France/KLM of trying to block competition in the French market. “This is typical of a monopolist trying to keep competitors out of the market,” says Jim Callaghan, head of regulatory affairs at the Irish low-cost carrier. He adds that Marseilles has been one of the few airports in Europe to see its traffic go down since the liberalisation of air travel in Europe.
Neil Baylis, partner at law firm Kirkpatrick & Lockhart Nicholson Graham, says it is far from certain that Ryanair will succeed in its complaint, given that Air France appears to be paying five times the Ryanair rate. “Air France may well have a legitimate issue here. The charges should relate to cost, and you can develop decent economic models to demonstrate costs and margins.”
For its part, Ryanair is claiming that Air France has benefited to the tune of €1 billion over a 13-year period through lower charges for French domestic traffic compared with intra-European flights. “This is contrary to the single market,” claims Callaghan, who argues that Air France/KLM is also effectively subsidised through the public service obligation rules that allow funds for air services to communities reliant on air travel.
The European Commission has said it will look into the rules governing public service obligations on the back of a spat between Ryanair and the Italian government over routes from the Italian mainland to the island of Sardinia.
Ryanair and Air France have had a series of court battles, most recently in May this year when a French court fined the Irish airline €250,000 for an advertising campaign ruled to be misleading and disparaging.
Ryanair also lost a case against Air France in 2003, when a French court ruled that the Irish carrier had benefited from illegal state aid at Strasbourg airport in the Alsace. ■
Source: Airline Business