Ryanair 2011 Annual Report Download - page 76

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on the European economy in general. There is in particular no justification for any environmental taxes on
aviation following the introduction of the Emissions Trading Scheme for airlines.
As a company, Ryanair believes in free market competition and that the imposition of any of the above
measures would favor the less efficient flag carriers – which generally have smaller and older aircraft, lower
load factors, and a much higher fuel burn per passenger, and which operate primarily into congested airports –
and reduce competition. Furthermore, the introduction of a tax at a European level only would distort
competition between airlines operating solely within Europe and those operating also outside of Europe. We
believe that the introduction of such a tax would also be incompatible with international law. See “Item 3. Key
Information—Risk Factors—Introduction of New or Increases in Existing Aviation Taxes Could Increase
Costs.”
Airport charges
The EU Airport Charges Directive of March 2009 sets forth general principles that are to be followed
by airports with more than five million passenger per annum, and all capital city airports irrespective of their
passenger throughput, when setting airport charges and provides for an appeals procedure for airlines in the
event they are not satisfied with the level of charges. However, Ryanair does not believe that this procedure will
be effective or that it will constrain those airports that are currently abusing their dominant position. This
legislation may in fact lead to higher airport charges, depending on how its provisions are implemented and
applied by EU member states and subsequently by the courts. The directive was to be transposed into national
legislation throughout the EU by March 2011 but some member states have not yet transposed the directive.
Slots
Currently, the majority of Ryanair’s bases of operations have no “slot” allocations; however, traffic at a
substantial number of the airports Ryanair serves, including its primary bases, are regulated by means of “slot”
allocations, which represent authorizations to take off or land at a particular airport within a specified time
period. In addition, EU law currently regulates the acquisition, transfer, and loss of slots. Applicable EU
regulations currently prohibit the buying or selling of slots for cash. The European Commission adopted a
regulation in April 2004 (Regulation (EC) No. 793/2004) that made some minor amendments to the current
allocation system, allowing for limited transfers of, but not trading in, slots. Slots may be transferred from one
route to another by the same carrier, transferred within a group or as part of a change of control of a carrier, or
swapped between carriers. In April 2008, the European Commission issued a communication on the application
of the slot allocation regulation, signaling the acceptance of secondary trading of airport slots between airlines.
This is expected to allow more flexibility and mobility in the use of slots and will further enhance possibilities
for market entry. Any future proposals that might create a secondary market for the auction of slots or allow
trading of slots among airlines could create a potential source of revenue for certain of Ryanair’s current and
potential competitors, many of which have many more slots allocated at present than Ryanair. Slot values
depend on several factors, including the airport, time of day covered, the availability of slots and the class of
aircraft. Ryanair’s ability to gain access to and develop its operations at slot-controlled airports will be affected
by the availability of slots for takeoffs and landings at these specific airports. New entrants to an airport are
currently given certain privileges in terms of obtaining slots, but such privileges are subject to the grandfathered
rights of existing operators that are utilizing their slots. While Ryanair generally seeks to avoid slot-controlled
airports, there is no assurance that Ryanair will be able to obtain a sufficient number of slots at the slot-
controlled airports that it desires to serve in the future at the time it needs them or on acceptable terms.
Other
Health and occupational safety issues relating to the Company are largely addressed in Ireland by the
Safety, Health and Welfare at Work Act, 1989; the Safety, Health and Welfare at Work (General Application)
Regulations, 1993; and other regulations under that act. Although licenses or permits are not issued under such
legislation, compliance is monitored by the Health and Safety Authority (the “Authority”), which is the
regulating body in this area. The Authority periodically reviews Ryanair’s health and safety record and when
appropriate, issues improvement notices or prohibition notices. Ryanair has responded to all such notices to the
satisfaction of the Authority. Other safety issues are covered by the Irish Aviation Orders, which may vary from
time to time.