France slaps fine on Ryanair

The court in southern France ruled Ryanair would have to pay nearly 10 million euros ($13.5 million) in damages and interest after being found guilty of neglecting labor regulations in the eurozone's second-biggest economy.

It also fined the company an extra 200,000 euros for illegally giving Marseille-based staff Irish contracts in order to save on payroll and taxes. Ryanair had said before the verdict that it would appeal any sanctions.

But if upheld, the damages would need to be paid to France's social security system, the state pension fund and unions all of which appeared as plaintiffs in the legal action against the low-budget carrier.

Matter of interpretation

Ryanair had argued that it did not have a permanent base in the Marseille area and that there was therefore noting wrong in keeping its workforce on Irish job contracts. But prosecutors said that claim was not really credible as the airline had established offices at the airport and its staff were living locally.

Experts noted the fines would certainly be a blow to Ryanair, but one the company could afford in the face of 569 million euros in profits logged during the last fiscal year.

Ryanair could have faced even heavier penalties in line with a prosecution request, but the judge rejected a fine equivalent to the value of the four Boeing 737s the airline had flown out of Marseille between 2007 and 2011.

hg/msh (dpa, AFP, AP)