Ryanair under fire at Charleroi
In December 2003, the Irish 'low-cost' airline Ryanair is threatening to cease operations at Charleroi airport in Belgium if, as part of a competition probe, the European Commission decides to invalidate aid provided by the public company managing the airport and - in exchange for setting up business in Wallonia - by the Walloon government. The trade unions have simultaneously criticised Ryanair's industrial relations policies.
The Irish-based 'low-cost' airline Ryanair may be penalised during December 2003 by the European Commission for receiving unlawful public aid when establishing its business at Charleroi airport in Belgium, which is its base in continental Europe. Charleroi airport is situated under 45 minutes from the greater Brussels area, and is typical example of the second-ranking airports that Ryanair favours. In 2001, the Walloon regional authorities and Brussels South Charleroi Airport (BSCA), the airport management company in which the Walloon region has a 100% stake, awarded Ryanair a 50% reduction in landing fees and set a fee of EUR 1 per passenger for ground-handling assistance (10% of the airport’s basic rate). Ryanair has also received from BSCA substantial start-up benefits such as a contribution to accommodation costs, subsistence, and the recruitment and training of pilots and cabin crew. In addition, BSCA pays EUR 4 per passenger by way of contributing to Ryanair’s advertising costs and to reductions in ticket prices. For its part, the company has promised to base between two and four planes at the airport, and to have at least three flights per plane leaving Charleroi every day. Ryanair now services 12 destinations from Charleroi, generating traffic of 2 million passengers a year. It estimates that its operation in Charleroi has led to the creation of 200 direct jobs, and calculates that each passenger saves about EUR 100 on average by opting for Ryanair rather than for one of the 'regular' airlines using Zaventem airport in Brussels.
Ryanair has been established at Charleroi since 1997, and has been attacked by rivals on the grounds of unfair competition. For example, Virgin Express, which also offers low-cost air fares, estimates that the direct and indirect aid given by Charleroi airport provides Ryanair with a benefit worth EUR 30 per passenger. The matter has been brought to the attention of the European Commission. The Commission has also received official complaints concerning Ryanair’s activities at Strasbourg and Pau in France.
The European Commission’s decision on the legality of the benefits awarded to Ryanair by Charleroi airport will be a 'landmark case', which, according to a Commission spokesperson, will have implications for the whole of the European air transport sector. 'Quite clearly', said the spokesperson for the EU Transport Commissioner, Loyola de Palacio, 'this will be a landmark case that will give indications to operators, which will then know what is acceptable and what is not' in respect of benefits given by airports. The Commission is expected to publish its decision in December 2003.
The few signals emanating from the Commission so far suggest that the final decision will be balanced, opposing some forms of aid and agreeing to others. The Ryanair chief executive, Michael O’Leary, has announced that he will appeal immediately against a negative decision to the European Court of Justice. Mr O’Leary has also said that his firm might pull out of Charleroi.
On 17 November, while the legal dispute continued, the European Transport Workers’ Federation (ETF), which groups European trade unions in the air transport sector, accused Ryanair of being 'anti-social and anti-union' (EU0312204N). According to a press release issued by ETF after it held a symbolic demonstration outside the Charleroi labour tribunal, the company 'does not recognise any worker organisation and accordingly no trade union has hitherto been able to establish itself in Ryanair to defend cabin crew', while employees have Irish contracts of employment and thus 'have no possibility to be defended in the country where they routinely perform their work'. The focus of the protest was that Charleroi labour tribunal will soon issue its decision on appeals lodged by three Ryanair employees at Charleroi, who ETF claims were dismissed 'without respecting Belgian law concerning trial periods, notice periods, overtime, holiday pay, monthly minimum average income, luncheon vouchers and transport expenses'. 'This is a crucial decision', stated Tony Demonte, a union delegate from the Confederation of Christian Trade Unions (Confédération des Syndicats Chrétiens/Algemeen Christelijk Vakverbond, CSC/ACV), because it could generate case law in relation to the application of Belgian law to employees of multinational companies. However Eddie Wilson, Ryanair's head of human resources, states that the company 'complies with national and international law', and bases employment contracts on Irish law because of the international nature of the work carried out by staff working at Charleroi.
In May 2002, the three Ryanair employees concerned were not retained following a one-year trial period. According to the unions, under Belgian law their trial period should have been shorter, and the employees were entitled to a severance payment. The trade unions also state that management has refused to discuss matters with them, and claim that pressure has been exerted on unionised staff. This accusation has been rejected by Ryanair, which says that it respects the right of everyone to join a trade union. However, it refuses to give the unions the status of a legitimate partner, citing the 'right' of employees 'to negotiate directly their working conditions and pay through their elected representatives'. The 'Ryanair system' provides for the election of employee representatives onto (three-member) committees representing each of the 30 divisions making up the company. In Belgium, these committees have negotiated collective agreements lasting five years and, according to Ryanair, pay conditions are more beneficial for workers than in other companies.