Ryanair Fined $11 Million by French Court Over Social Payout

Ryanair Holdings Plc (RYA), Europe’s biggest discount carrier, said it was fined 8 million euros ($11 million) by a French court today over social contributions for crews flying to and from Marseille.

The bulk of the sum relates to alleged non-payment of social security and state pension obligations in France, according to the Dublin-based airline, which said the levies should not have applied since crews who operated Marseille routes from 2007 to 2010 were employed on Irish contracts.

“Ryanair believes there is a clear contradiction between current European Union employment regulations under which these Irish workers paid their taxes and social taxes in Ireland, and the 2006 French decree, which seeks to require airline crews operating in Ireland to pay social taxes and pension contributions in France,” the airline said in a statement.

Ryanair said in the release that it will study the ruling by the court in Aix En Provence and intends to lodge an appeal and pursue the matter “all the way to the European courts.”

The airline said it closed its year-round operation in Marseille when the legal action was begun and that the case does not concern a summer-only operation that started in April 2011 under a different base structure.

Today’s court action was a criminal case, with civil parties who allied themselves to the prosecution including the French social security office, the pension program, the employment office and the SNPL pilot union.

SNPL President Yves Deshayes said by phone that he was “very happy” with the outcome of the hearing, which showed that Ryanair had imposed “illegal” working conditions.

“Ryanair and its people continue, and will continue, to comply fully with Irish and EU regulations, employment law, income taxes and social tax obligations,” the carrier said.

Shares of the airline traded 0.3 percent lower at 6.37 euros as of 3:56 p.m. in Dublin.

To contact the reporters on this story: Kari Lundgren in London at klundgren2@bloomberg.net; Andrea Rothman in Toulouse at aerothman@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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