Ryanair News

News Release

15.04.11

Briefing note - Cancellation levy

RYANAIR’S €2 DELAY/CANCELLATION LEVY

1. This €2 levy was introduced on 4^th April 2011 (see press release below) to cover over €100m in non -recoverable costs suffered by Ryanair resulting from flight delays, cancellations and EU261 expenses during 2010, primarily caused by 15 days of volcanic ash airspace closures (April/May), 18 days of snow related airport closures (Nov/Dec) and a total of 21 days of national ATC strikes/closures mainly in Germany, Belgium, France and Spain during 2010.

2. Ryanair expects this levy to raise approx. €90m in 2011, since the levy will not apply to Ryanair’s lowest advertised promotional fares (approx. 20% of tickets) and because 20% of seats have been pre-sold in 2011 prior to the introduction of the levy.

3. If Ryanair’s delay/cancellation/EU261 costs decline in 2011, then this levy will be reduced pro-rata in 2012. Equally if costs increase in 2011, then this levy will be raised in 2012.

4. This levy is governed by Irish law under which all Ryanair contracts operate. It cannot be overturned or interfered with by national rules/regulations in other EU countries.

5. This levy is agreed to by all Ryanair passengers at the time of booking and forms part of their contract with Ryanair.

6. There is no basis for Spanish Consumer Association claims that this levy is illegal. All airlines are free under the European Union Constitution to determine what services they provide and what prices they charge.

7. Ryanair calls on these Spanish Consumer Associations to explain why they appear to object to Ryanair’s €2 delay/cancellation levy, but have voiced no objection to Iberia’s €25-€40 fuel levy? This should be explained.

8. Since all bookings on Ryanair are governed by Irish, not Spanish law, no consumer regulation in Spain can revoke or overrule this €2 levy.

9. Ryanair is campaigning for the reform of EU261 regulations to bring them into line with similar regulations for EU rail, coach and ferry operators. The two reforms Ryanair seeks is (a) the introduction of a “force majeure” clause under which airlines will not be liable for delays or cancellation caused by “Acts of God” or reasons beyond an airline’s control (such as ATC strikes, bad weather, and/or Icelandic volcanic eruptions) and (b) an effective right of recovery under EU261 so that airlines can recover these costs from the Governments (when they close airspace), European ATC and ATC unions (when they go on strike) or EU airports (if they shut their airports for snow closures). If Ryanair’s campaign for reform is successful, then Ryanair’s costs of delays, cancellations and EU261 payments will be significantly reduced or eliminated and so will this €2 levy.

10.Ryanair invite these Spanish Consumer Associations to join Ryanair’s campaign to reform the EU261 regulations, not least to protect Spanish consumers/visitors from repeated ATC strikes and go-slows in Spain. If these agencies really cared about consumers they would be working with Ryanair to end these strikes which repeatedly delay and disrupt the travel plans of millions of consumers to/from Spain each year.

PRESS RELEASE

RYANAIR TO INTRODUCE EU261 COMPENSATION LEVY OF €2

Ryanair, Europe’s favourite airline, today (30^th Mar) announced it would introduce a €2 levy per passenger for all bookings made from Monday 4^th April 2011 in order to fund its costs of flight cancellations, delays and its EU261 costs in “force majeure” cases where the airline is not responsible for either the delays or cancellations.

Ryanair confirmed that over the past year it has suffered costs of over €100m arising from flight cancellations, delays and providing right to care, compensation and legal expenses arising from more than 15,000 flight cancellations and over 2.4 million disrupted passengers, with the majority of these claims arising in three periods during which Ryanair was prevented from flying by the failure/inaction of third parties including:

a) the Icelandic volcano airspace closures of April/May 2010,

b) the snow closures of many EU airports during November/December 2010,

c) over 15 days of national ATC strikes, primarily in Belgium, France, Germany and Spain in summer 2010, which caused repeated flight delays and cancellations.

Ryanair believes that the unfair and discriminatory elements of the airline EU261 regulations should be amended to relieve airlines of the burden of providing care in cases where the cancellations and/or delays are clearly not the responsibility or fault of the airlines.

It is unfair and discriminatory that airlines are made liable for providing refunds, meals, hotels and phonecalls during ATC strikes, bad weather airport closures, or (volcanic) airspace closures when even travel insurance companies avoid liability during these “force majeure” events, and when competing transport providers (rail, ferries and coach operators) have no such “force majeure” liability under their equivalent EU261 regulations.

These unfair and discriminatory EU261 expenses cannot be loaded onto airlines without being passed on to passengers. Over the past year, Ryanair has suffered more than €100m arising from flight delays, cancellations and related right to care compensation, and legal costs overturning unlawful fines by Government regulators who have tried to extend EU261 to cover cases specifically excluded from EU261.

Ryanair’s €2 EU261 levy will help to defray these costs, which are not recoverable from Governments, ATC providers or airports and which therefore fall on the airlines in their entirety. Ryanair also confirmed that if the EU261 regulations are reformed, to include an effective right of recovery clause and a non discriminatory “force majeure” clause then it will reduce and/or eliminate this levy altogether as Ryanair’s cancellation and delay costs reduce over the coming years.

Ryanair’s Stephen McNamara said:

“The EU261 regulations are clearly discriminatory in the way they are applied to airlines, by making airlines responsible for delays, cancellations and right of care expenses during force majeure events such as volcanic eruptions, the snow closure of airports and the frequent ATC strikes across Europe. Despite repeated calls, the European Commission and EU Governments have still failed to make Europe’s ATC services an essential service, which (like their U.S. ATC counterparts) should not have the right to strike.

“ It is clearly unfair that airlines are obliged to provide meals and accommodation for passengers (for days and weeks in some cases), simply because governments close their airspace, or air traffic controllers walk off the job, or incompetent airports fail to clear their runways of snow. When the EU261 regulations were first introduced, airlines were assured that they could recover the cost of these cancellations and delays from those parties who caused them. However the airlines have no right of recovery from Governments (when they close airspace), ATC unions (when they repeatedly walk off the job), or airports (who can’t even clear snow off their runways). It’s a crazy situation that travel insurance companies paid out nothing during the volcanic ash crisis last year (because it was an “Act of God”), yet the airlines were forced to pick up weeks of delays, cancellations, hotel and restaurant costs.

Our EU261 levy enables us to contribute to these costs, while still maintaining Ryanair’s unbeatable low fares. We hope that we will ultimately succeed in removing the discriminatory provisions of the EU 261 regulations which oblige airlines to suffer millions of euro in delays, cancellations and care expenses, even during “force majeure” events which are clearly beyond our control. We are also seeking to have any EU261 compensation linked to the air fare paid, as it is the case for competing rail, ferry and coach transport, so that there is a level playing field between transport providers across Europe.

While we regret the imposition of this €2 EU261 levy, the extraordinary costs which have been imposed on us by delays and cancellations under these discriminatory regulations must be recovered from passengers. Ryanair remains the only airline in Europe to guarantee the lowest air fares on every route we operate, and we are also one of the very few airlines in Europe to continue to avoid fuel surcharges, while many of Europe’s airlines not only levy fuel surcharges, but have been raising them unfairly in recent months”.