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Ryanair pulling out of Marseille ?


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Ryanair are determined to pay their French employees from Ireland. The French government is determined that Ryanair employees based in France should pay French tax and has begun legal action against Ryanair. There seems to be a real possibility that Ryanair will pull out of Marseille as a result. Thursdays scheduled Ryanair press conference in Beziers was cancelled to allow concentration on the situation in Marseille. Obviously this has implications for expat residents in Languedoc who fly with Ryanair from Perpignan, Carcassonne, Rodez, Beziers, Montpellier, Nimes and Marseille. Poursuivi pour travail dissimulé, Ryanair veut quitter Marseille

Recent reports hint at Marseille competition for Ryanair : "Air France-KLM wants to create a cheap option for domestic flights to face competition from much more affordable carriers like Ryanair and easyJet. The airline would be known as Air France Express—they could have done better—and it would be set up next year with bases in Marseille, Nice, and Toulouse." Could this - Air France Looks to Compete with Ryanair by Launching Air France Express be a contributory factor ? Peter

Edited by Mod to reduce page width problem.

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So, essentially, Air France has knobbled the tax authorities so that Ryanair either have to pay more taxes and hence raise their fares to a level which suits the new Air Frrance 'low cost' entity, or they bugger off and leave the field to Air France who will be able to charge higher fares as there is no competition. This scenario sounds about right.
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Air France-KLM already has a "low cost" subsidiary - Transavia - though it is arguably more aligned with the KLM end. The prices generally aren't very "low cost" in my experience.

With regards to pulling out of Marseille: in order to get the deal that they obtained, Ryanair may have had to agree to base some aircraft there. If Ryanair loses this case, then all it has to do is to base the aircraft elsewhere and operate into MRS - which is what it did prior to setting up a base there. It might face a penalty for doing so, or it could wait until the deal is up for renegotiation. In any case, at present what seems to determine Ryanair's route choice above all else is the level of "marketing support" (euphemism for subsidy) provided by the airport. I they don't get a good deal, they move on.

Regards

Pickles

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"Air France-KLM already has a "low cost" subsidiary - Transavia - though it is arguably more aligned with the KLM end. The prices generally aren't very "low cost" in my experience.
With regards to pulling out of Marseille: in order to get the deal that they obtained, Ryanair may have had to agree to base some aircraft there. If Ryanair loses this case, then all it has to do is to base the aircraft elsewhere and operate into MRS - which is what it did prior to setting up a base there. It might face a penalty for doing so, or it could wait until the deal is up for renegotiation. In any case, at present what seems to determine Ryanair's route choice above all else is the level of "marketing support" (euphemism for subsidy) provided by the airport. I they don't get a good deal, they move on.

Regards
Pickles
" Transavia is mainly Amsterdam based, I think. Having watched Ryanair open up several new routes locally, over the last 10 yrs or so, I can vouch for the level of their marketing spend (and the operation of near empty flights) during the start up period. Not all routes have been succesful. Ryanair would argue that any marketing subsidy is to offset their outlay and losses in the earlier years. They currently employ 120 staff at Marseille. Much of the contribution is by CCI and tourist offices. Arguably it is cheaper than generating more custom through TV advertising? Marseille had an empty terminal when the arrival of the TGV decimated domestic flights. It was converted to a low cost flight terminal which attracted Ryanair. BA cut Gatwick flights, but the net result was a massive growth in low cost routes. Currently, 14 low cost airlines fly 61 routes(inc 26 by Ryanair) from Marseille. Peter
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Did not Air France try and knobble Ryanair a few years back, something to do with subsidising airports or something but lost. Didn't Ryanair threaten to stop flying to somewhere in France because of Air Frances complaint? I really can't remember much about this but I am sure somebody will remember and hopefully with a better memory than I.

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Absolutely correct Q - Strasbourg.  The exact details I cannot remember but something around the airport or the sponsoring group being publicly owned so they could not legally favour one airline against AF.

 

Ryanair response was to pull out and set up shop 15km away in Germany in Baden Baden - which is actually a tad closer to the European parliament which was I think the chosen target market -  You know claim the full Business class Air France fare for the expnses but actually fly RA.

 

 

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And on the subject of AF and a loco operation, I am often surprised by how cheap AF prices can be.  I am equally surprised how expensive they can be but that is another story.

 

For example I have just bought an AF return for 1 month's time for 20€.  Of course this is the RA style headline flight price and I have actually paid just shy of 120€ by the time that taxes, fuel surcharges, servies and ticket booking have been added, but I find that a not bad price given that I have the abaility to take 23kg hold baggage, will get free newspapers, a drink and a snack on board.

 

The closest equivalent from RA would have been 115€ without bags, papers, drinks etc. - and to an airport less convenient for me

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Perhaps curiously ...

Ryanair has (uncharacteristically quietly) announced some new routes :

Barcelona to Fuerteventura from 02 Nov 10

Barcelona to Leeds Bradford from 31 Oct 10

Barcelona to Porto from 31 Oct 10

Dusseldorf (Weeze) to Marseille from 2 Nov 10

Larnace to Girona (Barcelona) 01 Dec 10

Palermo to Marseille 03 Nov 10

Porto to Rodez 31 Oct 10

Rome (Ciampino) to Marseille 02 Nov 10

Seville to Marseille 02 Nov 10

Tenerife South to Marseille 01 Nov 10

Valencia to Marseille 02 Nov 10

Venice-Treviso to Marseille 02 Nov 10
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[quote user="Edward Trunk"]According to today's Midi Libre it is the French pilot's unions who have been leading the attack on Ryanair, and the same report said that O'Leary might pull all his French operations. He's not a man who likes being dictated to.[/quote]

 

Yes, but Mr O'Leary is an accountant and a realist. He has 250 aircraft which he has to keep in the air and filled with passengers. He can not afford to ignore the traffic associated with one of Europe's largest and wealthiest countries.

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[quote user="Clarkkent"]

[quote user="Edward Trunk"]According to today's Midi Libre it is the French pilot's unions who have been leading the attack on Ryanair, and the same report said that O'Leary might pull all his French operations. He's not a man who likes being dictated to.[/quote]

Yes, but Mr O'Leary is an accountant and a realist. He has 250 aircraft which he has to keep in the air and filled with passengers. He can not afford to ignore the traffic associated with one of Europe's largest and wealthiest countries.[/quote]

Yes, but the way he will service that traffic is to base the aircraft outside France and fly them in, doing "W" routeings, instead of basing aircraft in France.

Regards

Pickles

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RYANAIR ANNOUNCES CLOSURE OF MARSEILLE BASE

4 AIRCRAFT, 13 ROUTES, 200 JOBS LOST AT MARSEILLE,

AS AIRCRAFT AND JOBS SWITCH TO SPAIN AND ITALY

Ryanair, Europe’s favourite airline, today (13th Oct) announced that it will close its only French base at Marseille Airport from Tuesday 11th Jan 2011, following the commencement of legal proceedings against Ryanair’s Marseille base, where all of its 200 pilots and cabin crew work on Irish aircraft (i.e. Irish territory) and pay their taxes and social insurance contributions in Ireland where they receive their Irish pay. The four Marseille based aircraft (and 200 Ryanair jobs) will now be moved in January to competitor airports in Spain, Italy and Lithuania, with the result that 13 Marseille routes will be closed from 11th January. Ryanair will continue to operate 10 routes to/from Marseille Airport, on aircraft and crews that are based elsewhere.

Ryanair’s base at Marseille and its Flight Crews fully comply with the European Directive on Transport Workers which allows all mobile transport workers to pay income tax and social insurance in the country they work (which in this case is Ireland because they work on Irish registered aircraft which is defined as Irish territory) or where their employer is resident and where they are physically paid, which also in Ryanair’s case is Ireland. The French authorities wish to take a different view and claim that these mobile (Irish) workers should pay income tax and social insurance in France, rather than in Ireland, even though this is contrary to EU regulations.

The closure of Ryanair’s Marseille base and the loss of these aircraft and jobs demonstrates why the European regulations on mobile workers should be respected by France and why this attempt by the French authorities to force these mobile workers to pay taxes in France, when they are employed on Irish territory and paid in Ireland, are doomed to failure. Ryanair has taken a case in the European Courts against this French decree which clearly runs counter to EU rules on international transport workers.

Speaking today in Marseille, Ryanair’s Michael O’Leary said:

“We are very disappointed at this decision by the French authorities to initiate proceedings against Ryanair’s base in Marseille, which complies fully with EU regulations for mobile transport workers. These are not French jobs, but rather Irish jobs on Irish aircraft, which are defined by EU regulations as Irish territory. All of these people pay their tax and social insurance, in accordance with EU regulations, in Ireland and they remain fully tax compliant.

“Sadly the loss of these 4 aircraft, 200 jobs and 13 routes at Marseille is the high price necessary to demonstrate that these are mobile Irish workers, which is why they are covered by the EU regulations for mobile transport workers; and not by a local French decree which Ryanair is currently appealing to the European Courts . This ill-judged legal action has therefore cost Marseille and France jobs, foreign investment and lost visitors in circumstances where our Marseille base fully complies with EU regulations for transport workers.

“Ryanair remains committed to Marseille Airport and in particular to its low cost MP2 Terminal. Ryanair will now be working with the management of Marseille Airport to try to grow other routes and traffic, on aircraft which are based overseas, particularly as Ryanair opens up bases elsewhere in Europe. Sadly the loser in all of this will be Marseille Airport, tourism and jobs in the Provence region.”

10 Routes to Continue :

Brussels

Dusseldorf

Fez

London

Madrid

Malta

Porto

Rome

Seville

Valencia

13 Routes to Close :

Agadir

Brest

Eindhoven

Lille

Marrakesh

Nador

Nantes

Palermo

Paris

Tangier

Tenerife

Tours

Venice

Every cloud has a silver lining - my MIL lives near to Tours

Peter

_________________

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"I don't understand the impact on the Languedoc. You are posting this in the Languedoc part of this Forum."

Actually, I'm posting it in this section :

South East (Languedoc-Roussillon, Provence Alpes Côte d'Azur) ?

Marseille is the main airport for Provence, and is only 70km from Languedoc.

Languedoc is a big place with several very small airports. The best flight connections are Marseille (61 routes) and Girona in Spain (73 routes).

50% of LR is closer to Marseille ?

Montpellier is under 1hr 30 to Marseille airport.

2010 routes :

http://the-languedoc-page.com/tourism/languedoc-tourism-air.htm

Peter
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[quote user="mpprh1"]RYANAIR ANNOUNCES CLOSURE OF MARSEILLE BASE 4 AIRCRAFT, 13 ROUTES, 200 JOBS LOST AT MARSEILLE, AS AIRCRAFT AND JOBS SWITCH TO SPAIN AND

......... These are not French jobs, but rather Irish jobs ....................

..........therefore cost Marseille and France jobs.........................[/quote]

Make your mind up MoL - are they French or Irish jobs?

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Sea and air crew have always had a specific tax regime.

Ryanair’s policy of issuing Irish contracts to crew operating on Irish aircraft has already been upheld by the courts in Belgium, Germany and Spain which found that crews who operate on Irish registered aircraft are correctly employed in Ireland in accordance with EU law.

The four planes based at MRS employ 120 pilots and cabin crew locally - these are at the centre of the legal action. Withdrawal of the four 737's is estimated to be at the expense of 1m passengers per year and a further 1000 local jobs.

Ryanair now only have Marseille as a "base" in France having pulled out of others in the past.

Both Marseille and Strasbourg actions were based on attempts to establish a French monopoly on services.

Air France is the other main user of this airport with mainly domestic flights.

Sad ?

Peter

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Updates :

Air France Union celebrates Ryanair withdrawal from Marseille :

http://www.midilibre.com/articles/2010/10/15/DERNIERE-MINUTE-MARSEILLE-Le-depart-de-Ryanair-est-une-bonne-nouvelle-pour-les-contribuables-selon-l-Union-francaise-des-pilotes-de-ligne-1420461.php5

M le Maire of Marseille in talks with Sarkozy to change the French interpretation of EU law :

http://www.midilibre.com/articles/2010/10/15/A-LA-UNE-Le-maire-Jean-Claude-Gaudin-tente-de-sauver-l-unique-base-francaise-de-Ryanair-1420490.php5

Peter

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