Aer Rianta rethink required

That dull thud you will hear today, rumbling across the sea from Brussels, writes Fintan O'Toole , is the sound of Michael O'…

That dull thud you will hear today, rumbling across the sea from Brussels, writes Fintan O'Toole, is the sound of Michael O'Leary being hoisted with his own petard.

A petard was a small bomb, used in medieval sieges to break down a door or gate. The danger was that it might explode in the face of the poor sod who had to set it off. For years Michael O'Leary has been waging an ideological battle, using a bomb marked "competition" to break down his enemy's defences. Now it's gone off in his hands.

Let's be clear about the EU Commission's much-leaked ruling on Ryanair's receipt of state aid for its services to the regional airport at Charleroi. The Commission is wrong and Michael O'Leary is right. The people who run Charleroi, and Pau and Hahn and all the other little airports that have done deals with Ryanair, should be allowed to get on with it.

Ryanair's willingness to put regular services into these places has been good for regional development, good for passengers, and obviously good for the company. Customers get cheap flights and access to a wider range of destinations. The regions get, not just a boost to tourism, but an asset that can be used to attract other kinds of investment. The relatively small subsidies from local governments make sense.

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But they are, of course, an interference in the so-called free market. They go against the ideological insistence that the market, left to itself, will create the best of all possible worlds. They are a recognition that the pursuit of social goals - in this case balanced regional development and general economic growth - often requires the active intervention of public, communal authorities. They are a tacit acknowledgement that competition, while generally a good thing, should not be made into a shibboleth. Competition, they suggest, is not a god to be worshipped but a device like any other - sometimes useful, sometimes not.

Since the early 1980s, however, competition has been seen, especially by the EU, not as one consideration among many, but as the ultimate economic principle. It is a card that trumps all others, scooping the pot over other values like justice, democracy, equality, and often, common sense.

The most vivid, insistent and effective proponent of this view in Ireland is Michael O'Leary. Competition is one of his favourite words. Last year, for example he told the Oireachtas Joint Committee on Transport that "the best solution is competition. Competition results in improved service and lower costs. In every sector of this country where we have introduced competition on top of monopolies or regulation, prices have come down and services have increased".

Nobody would deny that there is some truth in these claims. In most areas where consumers buy things, it is pretty much self-evident that competition helps. The success of Ryanair has forced Aer Lingus to respond by dropping its fares. Much of the choice is often more theoretical than real - mobile phone companies, for example, sell basically the same service and in spite of all the complicated deals and packages, do so for basically the same price. But the argument in these cases is for more competition, not less.

The problem, though, is that its evident benefits in many areas leads true believers to see competition as a cure-all. It ceases to be a tool and becomes an icon. It is applied to areas where it makes no sense at all.

The break-up of Aer Rianta by Michael O'Leary's mini-me Seamus Brennan is a case in point. From a consumer's point of view, the idea of competition between Dublin, Shannon and Cork airports, is patently absurd. How many Dubliners would choose to fly to London from Cork even if the fare was cheaper?

For a small number of people in the south midlands, the choice between the three airports might conceivably be real, but for the vast majority of potential consumers it is a nonsense. And even Ryanair, which has been extraordinarily creative in its use of geography, would find it difficult to persuade incoming passengers that Shannon is really Dublin.

Last year, Michael O'Leary told the Oireachtas committee that "Brussels-Charleroi is a valid model for the development of Shannon or Dublin". Which means, according to the Commission's ruling, that after the break-up of Aer Rianta, the major Irish airports would then be unlawfully subsidised by the local authorities in their regions.

We would have taken a successful company that gets no public subsidy and turned it into three companies that rely on the public purse. And we would have done this, ludicrously, in the name of the free market and competition. Even if we still wanted to go ahead with this daft notion, though, we couldn't do it - the Com- mission has made it clear that Charleroi is not a valid model for the development of anything. It would be nice if the absurdity of what is being done to Ryanair in the name of the great god competition caused Michael O'Leary to modify his views, but that's probably too much to expect. Surely, though, the Govern- ment has to rethink a strategy based on nothing more than the hunch that he must always be right.