Ryanair 2016 Annual Report Download - page 117

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alleged aid. Ryanair has appealed the five “aid” decisions to the EU General court. These appeal proceedings are expected
to take between two and four years.
Ryanair is facing similar legal challenges with respect to agreements with certain other airports, notably Lübeck,
Klagenfurt, Paris (Beauvais), La Rochelle, Carcassonne, Cagliari, Girona, Reus and Târgu Mureș. These investigations
are ongoing and Ryanair currently expects that they will conclude in late 2016, with any European Commission decisions
appealable to the EU General Court.
State aid complaints by Lufthansa about Ryanair’s cost base at Frankfurt (Hahn) have been rejected by German
courts, as have similar complaints by Air Berlin in relation to Ryanair’s arrangement with Lübeck airport, but following a
German Supreme Court ruling on a procedural issue in early 2011, these cases will be re-heard by lower courts. In addition,
Ryanair has been involved in legal challenges including allegations of state aid at Alghero, Marseille and Berlin Schönefeld
airports. The Alghero case (initiated by Air One) was dismissed in its entirety in April 2011. The Marseille case was
withdrawn by the plaintiffs (subsidiaries of Air France) in May 2011. The Berlin Schönefeld case, initiated by Germania,
was discontinued following the European Commission’s finding in February 2014 that Ryanair’s arrangement with the
airport contained no state aid.
In September 2005, the European Commission announced new guidelines on the financing of airports and the
provision of start-up aid to airlines departing from regional airports, based on the European Commission’s finding in the
Brussels (Charleroi) case, which Ryanair successfully appealed. The guidelines applied only to publicly owned regional
airports, and placed restrictions on the incentives these airports could offer airlines to deliver traffic. Ryanair deals with
airports, both public and private, on an equal basis and receives the same cost agreements from both. The guidelines have
therefore had no impact on Ryanair’s business, although they have caused significant uncertainty in the industry in relation
to what public airports may or may not do in order to attract traffic.
Ryanair argued that the positive decision by the CFI in the Brussels (Charleroi) case in December 2008 required
the European Commission to rethink its policy in this area. The revised guidelines, published by the European Commission
in April 2014, provide more certainty in the industry as to how public airports may deal with airlines in offering incentives
for traffic growth. However, adverse rulings in the above or similar cases could be used as precedents by competitors to
challenge Ryanair’s agreements with other publicly-owned airports and could cause Ryanair to strongly reconsider its
growth strategy in relation to public or state-owned airports across Europe. This could in turn lead to a scaling back of
Ryanair’s growth strategy due to the smaller number of privately owned airports available for development. No assurance
can be given as to the outcome of these proceedings, nor as to whether any unfavorable outcomes may, individually or in
the aggregate, have a material adverse effect on the results of operations or financial condition of the Company.
In November 2007, Ryanair initiated proceedings in the CFI against the European Commission for its failure to
take action on a number of state aid complaints Ryanair had submitted against Air France, Lufthansa, Alitalia, Volare and
Olympic Airways. Following the European Commission’s subsequent findings that illegal state aid had been provided to
Air France and Olympic Airways, Ryanair withdrew the two relevant proceedings. The case related to Lufthansa concluded
with the EU General Court’s ruling in May 2011, in which the Court found that while the European Commission has not
failed to act, it has unreasonably delayed the launch of the investigation, which justified Ryanair’s action for failure to act.
Consequently, the Court ordered the European Commission to pay 50% of Ryanair’s costs in the proceedings. Similarly,
in October 2011, the General Court found that the European Commission has failed to act on Ryanair’s 2005-2006
complaints against state aid to Alitalia. The European Commission appealed the ruling to the Court of Justice of the
European Union, and on May 16, 2013, the European Commission’s appeal was rejected.
In November 2008, Ryanair initiated proceedings in the CFI contesting the European Commission’s refusal to
grant Ryanair access to documents relating to the European Commission’s state aid investigations at Hamburg (Lübeck),
Tampere, Berlin (Schönefeld), Alghero, Pau, Aarhus, Bratislava and Frankfurt (Hahn) airports. These cases were heard on
July 7, 2010 and a judgment was issued in December 2010. The CFI found that the European Commission had acted in
line with applicable legislation, which highlighted the unfairness inherent in state aid procedures in the EU, whereby
alleged beneficiaries of aid have no right of access to the European Commission’s files and therefore cannot properly
exercise their rights to defense and good administration. The CFI ordered the European Commission to pay Ryanair’s costs
in three of the eight access to documents cases.