Thomas Cook boss slams Ryanair Canaries subsidies
03.04.10
Holiday company Thomas Cook has warned it may cut capacity to the Canary Islands in response to the Spanish government and local authorities paying what it claims are ‘unfair subsidies’ to Ryanair, Travel Weekly reports. The low-cost airline will fly from nine UK airports to 4 Canary Island locations this summer season, supported by what it refers to as 'airport operator discounts’. However Thomas Cook claims Ryanair receives a subsidy of at least €6.50 per passenger, helping it unfairly take market share from charter carriers.
The payments were initially agreed for new capacity and flights on non-peak days when charter airlines seldom fly to the islands. Charter carriers had been also assured the payouts would finish this year, but they recently learned of an extension. Ryanair confirmed the ‘discounts’ in December when it introduced new routes to Lanzarote, Gran Canaria and Tenerife ‘after the local government confirmed its airport discount scheme would run until at least March 2012’.
Thomas Cook chief executive Manny Fontenla-Novoa told the travel industry newspaper: ‘It’s appalling. I’m shocked, disillusioned and feel let down. We had been guaranteed the ‘subsidies’ Ryanair was given were for a year only.’ He stated the subsidies were offered by Spanish airports authority AENA following a decree by the Spanish government, which responded to pressure from the Canary Island authorities.
Mr Fontenla-Novoa warned the holiday company may transfer capacity to Turkey and Egypt. He said ‘The Spanish government is in danger of losing the most loyal partners it has ever had. We have to digest what the government has done and establish whether or not it’s legal. I care about Spain - I am from Spain - but we have other choices.’
A Ryanair spokesman denied it received subsidies and said no such allegations had ever been substantiated in court. He said: ‘Instead of complaining, Thomas Cook should apply for the Canary Island discount scheme, reduce its fares and compete on price, one thing it has never had to do in the Canary Islands.'
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