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Ryanair fined by French court

Article By: ,  Financial Analyst
October 31, 2014 4:41 PM

Low cost Irish airline Ryanair has been fined by a French court after it was found to be in breach of French labour laws.

The company was ordered to pay €8.1 million (£6.4 million) in damages and €200,000 in fines by the appeal court in Aix-en-Provence. Ryanair has been found guilty of paying workers under Irish contracts in a bid to avoid having to make French social security payments. The charge relates to the company's staff who worked at Marseille airport between 2007 and 2010.

Ryanair was originally hit with a €8.8 million charge which included €4.5 million of backdated social charges as well as €3 million in pension contributions and €450,000 in unemployment charges.

However, the airline contested the decision in October 2013 arguing that its staff had already paid social taxes and pension contributions in Ireland. While the decision was upheld by the French appeal court the fine was reduced by €700,000.

Despite being hit with a significant fine Ryanair's share price opened 0.97 per cent up at 08:54 on Wednesday (October 29th) morning. The company also announced a number of changes to its services that will come into effect over the coming months.

City of Derry airport confirmed that Ryanair was pulling its Londonderry to Birmingham service following a review of its winter network. The Northern Irish airport described the move as "disappointing" while Ryanair did not comment on the subject. The service will be withdrawn on November 20th.

The airport said: "We understand that the decision by Ryanair to cease services on this route is part of a wider review by the airline of their winter network where they have reduced services and frequencies on over 30 other routes."

Ryanair has also relocated its Derry to Glasgow Prestwick service to Glasgow International.

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