Low-cost airline Go received up to €1.5 million in discounts and support from State airports authority Aer Rianta during its short-lived career offering flights between Ireland and Scotland, The Irish Times learned yesterday.
The Competition Authority said yesterday that Aer Rianta has agreed to change support schemes it uses to attract new passenger traffic to Dublin, Cork and Shannon airports. The announcement followed a 16-month investigation sparked by a complaint from Ryanair about the concessions it said Aer Rianta offered its competitor.
The low-cost airline, headed by Ms Barbara Cassani, launched services between Dublin and Glasgow and Edinburgh in 2001. Ryanair immediately went into direct competition with it, starting a price war that Go lost after nine months, when it was forced to end the services.
Because it was a new player, Aer Rianta granted Go a number of discounts on airport charges and support with marketing its services. It is understood that the value of these supports ran to €1-€1.5 million.
Ryanair complained to the Competition Authority a number of times during 2000 and 2001. The authority said yesterday that its investigation revealed that Aer Rianta appeared to administer its support schemes in a "confusing, arbitrary and less than transparent way".
It also stated that the schemes could have been inconsistent with Competition Act provisions banning the abuse of a dominant position. "The authority felt that Aer Rianta should have been able to provide the necessary clarity and transparency without compromising commercial sensitivities," its statement said.
The authority's concerns were focused on the marketing supports Aer Rianta offered to new entrants to Irish airports and to airlines operating new routes. These account for 10 per cent of its incentive schemes, which include airport charge discounts.
Last night, Aer Rianta said it had always tried to ensure that it operated its incentive schemes in a fair, objective and non-discriminatory manner.
"By far the most important incentive schemes operated by Aer Rianta over the last 10 years have been the route-support schemes offering various levels of discounts on standard airport charges," its statement said.
"These schemes have always been published and fully transparent, unlike the case in many other airport companies.
"Aer Rianta acknowledges that certain measures proposed within the last two years by the Competition Authority would further enhance the clarity of its specific marketing support schemes. Aer Rianta is incorporating these recommendations into its current published schemes."
The competition watchdog's inquiry looked at transparency, whether the schemes discriminated against some airlines, the justifiable business argument for offering them and Aer Rianta's level of market power, which established that 90 per cent of passengers pass through its airports.
