Government agency Scottish Enterpise gave more than £650,000 to Ryanair, the airline at the centre of a staffing dispute that has resulted in thousands of flights from Scottish airports being cancelled this winter, The Ferret can reveal.
Figures obtained by The Ferret show that Scottish Enterprise (SE) – the Scottish Government’s economic development agency – gave a total of £653,523 in three grants to the firm over the last five years.
All three grants were to support Ryanair’s work at Prestwick, a company that announced a £1.1bn profit in May.
The extent of the subsidies prompted criticism from Scottish Labour who said the airline needs to “clean-up its act” over claims of poor treatment of its workers.
Environmental groups have questioned whether the government grants were compatible with the Scottish Government’s “world leading” climate change targets.
Despite the Scottish Government subsidy, a number of routes connecting with Scottish airports – including Stansted to Edinburgh and Glasgow, as well as Edinburgh to Szczecin, Glasgow to Las Palmas, and Hamburg to Edinburgh – will be suspended until March 2018.
Ryanair – Europe’s biggest airline – has narrowly avoided prosecution by the UK’s aviation watchdog after controversially scrapping these Scottish routes this winter.
Following the cancellations, the Civil Aviation Authority (CAA) announced it would consider taking enforcement action against the airline for not being clear with its customers over the compensation they were allowed to claim.
On Friday September 21, Ryanair notified its 715,000 passengers of their rights to compensation, just an hour before the CCA’s given deadline.
“Where we find that an airline is systematically flouting these rules, we will not hesitate to take action, to minimise the harm and detriment caused to passengers, as we have done with Ryanair in recent days”, CCA’s Chief Executive, Andrew Haines said in a statement.
“It appears that Ryanair has now capitulated. We will review their position in detail and monitor this situation to ensure that passengers get what they are entitled to in practice.”
The controversy along with news of Scottish taxpayer subsidies has prompted Scottish Labour to call on the SNP to hold Ryanair to account, and for the airline to “clean up its act.”
Reports of cancellations and the exploitation of workers are greatly concerning. Neil Bibby MSP, Scottish Labour
Neil Bibby MSP, Scottish Labour’s transport spokesperson, said: “As far as [the CCA] are concerned the company has not complied with the law and reports of cancellations and the exploitation of workers are greatly concerning.”
“Scottish Labour has previously raised concerns over SNP giveaways to companies like Amazon, which received taxpayer-funded grants while being criticised for poor workplace standards.
“As Ryanair is also in receipt of taxpayer support from the Scottish Government, the SNP has a particular responsibility to ensure that basic legal requirements are met and that the airline is held to the right standards.
“It is vital that money funnelled to private companies in grants is properly accounted for. And Ryanair needs to clean up its act.”
Aviation and huge public subsidies
News of the budget airline’s Scottish Enterprise grants comes just days after a report from the independent climate change advisory body called on the Scottish Government to do more to reduce transport emissions.
The Committee on Climate Change (CCC) report said that the Scottish Government required “firmer policies” if it were to meet the ambitious emissions reduction targets set out in the latest Draft Climate Change Plan.
“The balance of effort in the draft Climate Change Plan between the transport and buildings sectors is unrealistic”, read one of the CCC report’s key findings.
However, the Scottish Government told The Ferret that reducing emissions and subsidising airlines like Ryanair could be done “simultaneously”.
“Scotland is a global leader in tackling climate change, while also investing in jobs and economic development,” said a Scottish Government spokesperson.
“It is not only possible to do both simultaneously, it is imperative that we do. Scotland is well on track to meet our world-leading statutory emission target for 2020.”
The spokesperson added: “We are currently considering the responses to the public consultation on our proposed Climate Change Bill that will set even more ambitious targets for the reduction of greenhouse gas emissions and ensure that we meet our obligations under the Paris Accord.”
Ryanair boss Michael O’Leary has long claimed – despite scientific evidence to the contrary – that man-made climate change is “complete and utter rubbish.”
But John Finnie MSP, transport spokesperson for the Scottish Greens, questioned the compatibility of grants to Ryanair with the Scottish Government’s pledge to reduce emissions.
He said: “Shovelling public money into the pockets of an airline with such a bad reputation, not to mention the ignorant views of its owner, will enrage the vast majority of Scots who face poor bus services, overcrowded railways and under investment in cycling infrastructure.”
Instead, he argued that the Scottish Government should use tax payers cash to support other forms of transport. “It’s everyday transport that should be the focus of the government and its agencies, rather than expansion of the most polluting form of travel,” he stated.
“Apart from lifeline routes to the islands, it’s hard to see how subsidising the aviation sector is compatible with the need to reduce emissions.”
Environmental campaign groups also lined up to criticise the subsidies.
Far from its claims to be a low-cost airline, Ryanair is proving itself to be very expensive when it comes to the Scottish public purse and the fight against climate change. Mary Church, Friends of the Earth Scotland
“We can see no good reason why Scottish Ministers should be doling out public subsidy to this private company,” said Transform Scotland’s director, Colin Howden, who is campaigning against the Scottish Government’s Air Departure Tax Bill which proposes cutting aviation tax.
“The aviation sector is very lightly taxed, paying neither fuel tax nor VAT, and yet is agitating for Air Passenger Duty to also be scrapped,” he added.
“Ryanair uses the comfortable tax relationship from which it benefits to make vast profits. sGiven that transport is the sector where no progress has been made over the past 25 years in cutting carbon emissions, it is damaging to the Scottish Government’s profile on climate change to be handing out subsidies to this most polluting form of transport.”
Friends of the Earth Scotland (FoES) also called on the Scottish Government to stop subsidising highly polluting activities such as Ryanair.
“The aviation industry demands huge public handouts whilst delivering billions in profits for shareholders,” said Mary Church, FoES Head of Campaigns.
“The Scottish Government needs to stop some parts of government subsiding highly polluting activities whilst others work hard to cut emissions,” she added.
“Far from its claims to be a low-cost airline, Ryanair is proving itself to be very expensive when it comes to the Scottish public purse and the fight against climate change.”
Church also condemned the controversial global warming views of O’Leary, Ryanair’s CEO.
The airline boss told Ireland’s RTÉ Radio One in April: “This kind of nonsense that we all need to cut back on beef production or that we all need to eat vegetables or go vegan and all start cycling bicycles is not the way forward.
“I think it’s complete and utter rubbish.”
O’Leary added: “I don’t accept that climate change is real. I don’t accept the link between carbon consumption and climate change.”
The airline chief’s views on climate change appear to be long-held. In a 2010 interview with The Independent, O’Leary said global warming was “bullshit”.
Church concluded: “Michael O’Leary’s outright denial of climate change undermines any pretense of concerns beyond pure profit for their shareholders.”
Ryanair did not respond to our requests for comment by the time of publication.