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Joined: Tue Oct 19, 2004 4:12 am

Trouble Ahead For Euro LCC's?

Wed Feb 09, 2005 1:51 am

We all know that airlines such as Ryan-air are able to offer ridiculously cheap fares because they receive local and state government aid to fly to small, seldom used airports. This most often includes waiving landing fees, parking fees and more in order to attract the likes of tourism that Ryanair can bring to small towns.

The EU announced today however that state aid assistance to airlines to using their airports is to be regulated.

From the BA staff intranet:

EU will regulate state-aid at regional airports

The European Commission confirmed it is currently drafting legally-binding guidelines to regulate state aid to regional airports following its battle with no-frills airline Ryanair last year, AFX reported. "The Ryanair case was a precedent," said Stefaan de Rynck, spokesman for transport commissioner Jacques Barrot.
"Following that, we said we would make rules for all 25 member states so that governments and airport managers know what the conditions are if they want to grant state aid."
Under the new plans, due to be unveiled officially by the commission today, governments would be able to grant state aid to cover 30-50% of the start-up costs accrued by airlines at regional airports over a maximum of five years.
The guidelines are for airports with fewer than 5 million passengers a year. State aid to airports with 5-10 million passengers a year will "be monitored with particular care," the commission said.
Other conditions apply, such as non-discrimination between airlines, and state aid will not be authorised "if there is already a competitive high-speed rail link".
Last February, Ryanair was ordered by the commission to repay approximately 4 million euro of a total 15 million in state aid given at Charleroi airport in Belgium.
The guidelines will come into force this summer after consultation with member states, De Rynck said.
The public funding of airport infrastructure will also be covered by the rules.
National governments are free to finance new air transport infrastructure, but the commission will monitor to ensure it does not favour national airport operators or airlines.

In other words, airports that offer 'fee free deals' to the liked of Ryanair or Easyjet will now also be obliged to offer the same deals to the flag carriers.

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Joined: Tue Dec 21, 2004 8:57 pm

RE: Trouble Ahead For Euro LCC's?

Wed Feb 09, 2005 1:53 am

Monkeyboy, another news is that due to EU laws also low cost carrier have to exercise their duties and passengers can get idemnity when there are delays, overbooking etc.

Not too bad news for passengers.
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