Ryanair will challenge “ludicrous” claims for refunds from passengers stranded by the ash crisis in a bid to overturn European Union regulations on airline compensation.
Chief executive Michael O’Leary today denounced the ash cloud as a “myth”. He said: “There was no volcanic ash. The airspace closure was entirely unnecessary. We should not have to pay because some idiot spilled coffee on a map of Europe and created a cloud. The only ash was between the ears of those at the Meteorological Office.”
The carrier has set aside euro50 million to refund one million passengers affected by delays and cancelled flights, but will take a handful of claims to court to seek a referral to the European Court of Justice.
O’Leary said: “The EU regulations are absurd, discriminatory and unfair. We will challenge about 20 ludicrous claims as a test case to challenge the regulations. He said one claim for euro2,900 was from a passenger who paid a euro34 fare to the Canary Islands.
The Ryanair boss welcomed a proposed class action by airlines seeking compensation from the government for the ash disruption, but said changing the regulations on passenger compensation was more important. “There must be a force majeure (‘superior force’ or ‘act of God’) clause [in compensation regulations] and some sort of relation to the fare,” he said.
Ryanair profited from the downturn of the past year, reporting a 14% year-in-year rise in passengers to 66.5 million and a tripling of profits to euro319 million (£280 million) for the 12 months to the end of March. Its revenue rose just 2% to euro2.988 billion over the same period, reflecting a euro5 or 13% fall in average fares to euro35.
O’Leary said: “We are doing less really cheap discounts. There have been no free seats this year.”
Shareholders will enjoy a euro1 billion windfall – half of it this year, half in 2013, with O’Leary himself receiving euro20 million – but a freeze on staff pay will remain.
The carrier is due to expand by a further 11% in the current year, but will rein in expansion from 2012-13. Thereafter, said O’Leary: “Expansion may be 4% a year. It may be nothing.” Ryanair recently pulled out of talks with Boeing to buy new aircraft following a dispute over price.