Ryanair 2011 Annual Report Download - page 108

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With respect to Dublin airport, Ryanair appealed the December 2009 decision of the CAR, which set
maximum charges at the airport for 2010 through 2014, to the Appeals Panel set up by the Minister for
Transport. In June 2010, the Appeals Panel found in favor of Ryanair on the matter of differential pricing
between Terminal 1 and Terminal 2, recommending that such differential pricing be imposed by the CAR. The
Minister of Transport subsequently overruled the decision of the Appeals panel and approved the charges
increase.
Ryanair has also been trying to prevent both the BAA in London and the DAA in Dublin from
engaging in wasteful capital expenditure. In the case of London (Stansted) Airport, the BAA was planning to
spend £4 billion on a second runway and terminal, which Ryanair believes should only cost approximately £1
billion. Following the final decision of the U.K. Competition Commission forcing BAA to sell London
(Stansted) airport, Ryanair believed that it was highly unlikely that BAA’s planned £4 billion plans would
proceed. The recently elected Liberal/Conservative government in the U.K. has also outlined that it will not
approve the building of any more runways in the Southeast of England. Consequently, in May 2010, the BAA
announced that it would not pursue its plans to develop a second runway at London (Stansted).
In the case of Dublin, the DAA has built a second terminal, costing over four times its initial estimate.
When the DAA first announced plans to build a second terminal (“Terminal 2”) at Dublin Airport, it estimated
that the proposed expansion would cost between 1170 million and 1200 million. Ryanair supported a
development of this scale; however, in September 2006, the DAA announced that the construction of Terminal 2
would cost approximately 1800 million. Subsequently, the cost of the new infrastructure rose in excess of 11.2
billion. Ryanair opposed expansion at what it believed to be an excessive cost. On August 29, 2007, however
the relevant planning authority approved the planning application from the DAA for the building of Terminal 2,
a second runway, and other facilities, all of which went ahead. On May 1, 2010, the airport fees per departing
passenger increased by 27% from 113.61 to 117.23, and could increase by up to 8% in November 2010 to
118.64 following the opening of Terminal 2 in November 2010 and by up to a further 12% in January 2011 to
120.88 in accordance with the CAR’s decision on December 4, 2009 in relation to airport charges between 2010
and 2014. Ryanair sought a judicial review of the planning approval; however, this appeal was unsuccessful.
The increase in charges, in combination with the introduction of the 110 Air Travel Tax mentioned above, could
lead to substantially reduced passenger volumes and a significant decline in yields on flights to and from Dublin
Airport. Ryanair has responded by moving to reduce capacity in both summer and winter periods. See “Item 3.
Risk FactorsRisks Related to the CompanyRyanair’s Continued Growth is Dependent on Access to
Suitable Airports; Charges for Airport Access are Subject to Increase” and “—The Company Is Subject to Legal
Proceedings Alleging State Aid at Certain Airports,” as well as “Item 4. Information on the Company—Airport
Operations—Airport Charges.”
Legal Proceedings Against Internet Ticket Touts. The Company is involved in a number of legal
proceedings against internet ticket touts (screenscraper websites) in Ireland, Germany, the Netherlands, France,
Spain, Italy and Switzerland. Screenscraper websites gain unauthorized access to Ryanair’s website and booking
system, extract flight and pricing information and display it on their own websites for sale to customers at prices
which include intermediary fees on top of Ryanair’s fares. Ryanair does not allow any such commercial use of
its website and objects to the practice of screenscraping also on the basis of certain legal principles, such as
database rights, copyright protection, etc. The Company’s objective is to prevent any unauthorized use of its
website. The Company also believes that the selling of airline tickets by screenscraper websites is inherently
anti-consumer as it inflates the cost of air travel. At the same time, Ryanair encourages genuine price
comparison websites which allow consumers to compare prices of several airlines and then refer consumers to
the airline website in order to perform the booking at the original fare. Ryanair offers licensed access to its flight
and pricing information to such websites. The Company has received favorable rulings in Ireland, Germany and
The Netherlands. However, pending the outcome of these legal proceedings and if Ryanair were to be
unsuccessful in them, the activities of screenscraper websites could lead to a reduction in the number of
customers who book directly on Ryanair’s website and consequently in a reduction in the ancillary revenue
stream. Also, some customers may be lost to the Company once they are presented by a screenscraper website
with a Ryanair fare inflated by the screenscraper’s intermediary fee. See Item 3. Key Information—Risk
Factors—Risks Related to the Company—Ryanair Faces Risks Related to Unauthorized Use of Information
from the Company’s Website.”