Ryanair fined by French court

<p>Ryanair has been ordered to pay €8.3 million by a French court.</p>

Low cost Irish airline Ryanair has been fined by a French court after it was found to be in breach of French labour laws.

The company was ordered to pay €8.1 million (£6.4 million) in damages and €200,000 in fines by the appeal court in Aix-en-Provence. Ryanair has been found guilty of paying workers under Irish contracts in a bid to avoid having to make French social security payments. The charge relates to the company's staff who worked at Marseille airport between 2007 and 2010.

Ryanair was originally hit with a €8.8 million charge which included €4.5 million of backdated social charges as well as €3 million in pension contributions and €450,000 in unemployment charges.

However, the airline contested the decision in October 2013 arguing that its staff had already paid social taxes and pension contributions in Ireland. While the decision was upheld by the French appeal court the fine was reduced by €700,000.

Despite being hit with a significant fine Ryanair's share price opened 0.97 per cent up at 08:54 on Wednesday (October 29th) morning. The company also announced a number of changes to its services that will come into effect over the coming months.

City of Derry airport confirmed that Ryanair was pulling its Londonderry to Birmingham service following a review of its winter network. The Northern Irish airport described the move as "disappointing" while Ryanair did not comment on the subject. The service will be withdrawn on November 20th.

The airport said: "We understand that the decision by Ryanair to cease services on this route is part of a wider review by the airline of their winter network where they have reduced services and frequencies on over 30 other routes."

Ryanair has also relocated its Derry to Glasgow Prestwick service to Glasgow International.

Find up to date information on the FTSE 100 and spread betting strategies at City Index.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.