Conclusiones

Ryanair’s aggressive posture in court is well-known all across Europe. But things are changing as customers, personnel and public authority no longer shy away from suing the airline in return. This change of pattern carries significant changes and some lawsuits pose a genuine threat to Ryanair as they could settle precedents which may be synonyms to dangerous consequences for the company.

Ryanair vs. Alessandra Cocca: the beginning of a revolution?

In 2013, two Ryanair flight attendants based in Norway decided to file lawsuits over their working conditions and abrupt dismissals, with the support of the Norwegian union Parat¹¹⁷. The core of the litigation laid in the fact that Ryanair employed its staff under Irish law, allegedly because they work on Irish-registered aircraft that are legally defined as Irish territory – a persistent argument advanced by the airline to avoid tougher labour laws in other European countries.

According to the plaintiffs, the carrier breached Norwegian labour law and the contracts under which the attendants worked were “slave contracts”. As usual, Ryanair’s contract described above (no sick leave, no social insurance in the base country…) was harshly criticized. However, the impact on the population and the media was tremendous and unprecedented, reaching up top officials. Norwegian Prime Minister requested a “national boycott” of the Irish airline, condemning the working conditions in Ryanair. Michael O’Leary had to go to Norwegian national television to defend the interests of the airline.

From a legal aspect, in order for the trial to take place, the Moss District Court (a lower chamber in Norway) was to determine whether the case fell under Irish or Norwegian law. On June 26^th, 2013, Moss District Court announced that Irish courts had jurisdiction over Norwegian’s.

At that time, only one flight attendant, Ms Alessandra Cocca, chose to appeal in a higher court level, which concluded in August that the trial must take place in Norway. Although Ryanair can appeal to the Supreme Court (the airline has up to October, the 5^th), Vegard Einan, the vice-president of Parat, claimed that an appeal would be advantageous for Ms Cocca as it would have greater impact across Europe.

The Ryanair vs. Cocca case was unprecedented: before this, no cabin crew had dared suing the airline due to what is frequently described as “a culture of fear”¹¹⁸. Mrs Cocca’s example could inspire other cabin crew to go along the same path. Following the announcement of the Norwegian case, six cabin crew members decided to file lawsuits over their working conditions, in Belgium this time¹¹⁹.

In any case, if the ruling favours the workers, Ryanair could witness an astounding rise of costs concerning thousands of employees.

31 Ryanair state aids’ polemic: a Damocles sword?

In 2004, two years after a formal investigation at the Charleroi airport, the European Commission ordered Ryanair to repay funds from Belgian authorities as they were declared illegal state aids. In 2008, an appeal at the European court in the favour of Ryanair dismissed the Commission judgment.

Ever since this judgment, Ryanair claims in the media that the European Court had proved that it never received state aids. Actually, the EU General Court annulled the decision over procedural flaw¹²⁰: therefore, it is misleading to claim that the EU General Court confirmed that Ryanair never received subsidies.

In actual fact, Ryanair’s misfortunes over state aids took a turn for the worse when the EC decided to reopen the Charleroi case, with due respect to procedure this time. It also decided to expand it to 22 other airports, out of which 17 cases concern Ryanair.

Although the results of the investigations were to be released in the first semester of 2013, recent evolutions have made it likely that the conclusions of the EC will be disclosed as late as early 2014.

Two precedents could objectively lead into thinking that these results will not be favourable to Ryanair:

• The initial ruling of the EC in the Charleroi case was disadvantageous to Ryanair. It might be safe to believe that the European Commission will take a similar ruling for other airports as the Charleroi case was denounced by a mere procedural flaw.

• EU antitrust regulators declared it would enforce law so to curb state aids¹²¹ in the airport industry – clearly aiming at Ryanair’s practices. Joaquin Almunia, the antitrust chief, also declared that they aimed to “ensure that taxpayers’ money is well-spent and goes where it is truly needed”. This statement appears as a clear hint to Ryanair’s business practices¹²². Supposing Ryanair were to reimburse the aids, the amount would be tremendous: an informal figure of 793 million of euros was advanced in the past¹²³. Although it remains quite difficult to assess how relevant this estimate is, Ryanair would definitely bleed hundreds of millions in case it was to reimburse the financial support it received across Europe all over the years.

Below, we have listed tables of Ryanair’s financial support according to press releases, reports from official bodies, annual reports of Commerce Chambers; this data is displayed under four categories:

• Airport’s name

• Rounded up amount, in euros, of financial support received or demanded by Ryanair

• The sum per passenger required by Ryanair, if the deal requested it

• The period of time over which the deal extended

• The public authority which granted the financial support

32 Spain¹²⁴: The situation in Spain bears a noticeable resemblance to France’s with payment of subsidies by the chambers of commerce (Camara de Comercio) on public money. Yet the financing systems seem to be a little more complex.

Even if there was no national investigation, information were revealed after some airports refused to pay for extra subsidies and when Ryanair decided to stop flying to these airports.

Portugal¹²⁵

Italy¹²⁶

Belgium¹²⁷

33 Germany¹²⁸

Malta¹²⁹

Slovakia¹³⁰

Aer Lingus case and its negative effects on Ryanair’s revenue:

Timeline of Ryanair’s attempt to take-over Aer Lingus:

34 As Ryanair stated in its annual report, a sale of Aer Lingus could significantly damages the airline. For a long time, Ryanair has attempted to take control of her Irish counterpart successively. European Commission and Aer Lingus have always blocked or rejected any take-over attempt, the former due to the situation of monopoly it could trigger. Meanwhile, the U.K. Competition Commission, through the voice of the Office of Fair Trading, decided to investigate whether Ryanair’s minority stake in Aer Lingus could constitute a factor of influence on the airline (see Timeline above).

Ryanair had to struggle against two institutional bodies believing that its presence in Aer Lingus could lead to a monopoly, or influence. However, it was also demonstrated from the results of the CC’s investigation that Ryanair prevented Aer Lingus from merging with another airline, which confirmed the belief that Ryanair’s presence in Aer Lingus represented a distortion of competition.

Although the LCC is set to appeal this decision, the chances of winning are thin¹³¹. Therefore, it’s a double-loss for Ryanair that will lose Aer Lingus, which was critical for its expansion strategy, and it may face the emergence of a greater rival, in case Aer Lingus successfully managed to merge with another airline.

B- Social, cost rise and safety: the pending threats on Ryanair’s