Europe’s Phony Ryanair Fiasco

The bureaucratic judges – for there is no rule of law here but mere rule of fiat – have spoken and the Belgian deal enabling UK’s budget airline Ryanair to use Charleroi airport, south of Brussels, has been declared non-competitive. Why? Allegedly other airlines weren’t provided with the same deal at the same time. The busy body European Commission declared that the deal Ryanair struck with the Charleroi folks was illegal. The Walloon authorities who negotiated it are deemed to have provided Ryanair with a subsidy, one that was unfair to other carriers, so as to benefit their region.

Well, gosh, how evil can you get, trying to benefit from a deal?

This kind of mess is hard to evaluate because the entanglement between state and commerce in Europe is so thorough and goes back so far in history that no one is likely to come out smelling like roses. European businesses are even more rife with actual government handouts than those in America, and the latter aren’t clean on this score by a long shot. Whenever these commercial ventures get into bed with the governments of the regions where they operate, dirty business is nearly impossible to avoid.

The Ryanair deal, however, doesn’t involve any subsidy at all, only the benefit one gains buy doing business in the first place. To wit, there simply is no such thing as fair dealing in business, as per the Commission’s silly demand. So not dealing "fairly" does not confer any kind of subsidy on anyone.

To check this out, consider your own commercial undertakings, say, at the mall or grocery store. Ask yourself: Am I giving all vendors a fair deal before I make a purchase? Yeah, sure – and if you buy that one, I have this bridge ready for sale to you!

Fair play is a bogus issue in trade. Fairness is important only when one has an obligation to provide service or consideration to some group of people, say, a teacher to one’s students or an airline carrier to those who have been promised provision on some flight. Then, and only then, can the complaint, "But it isn’t fair," have a bite to it.

Now in the case of Ryanair, it got certain breaks from the Belgians because it was going to bring in some decent business to the region where it was given landing privileges. Others, however, were not provided with the same deal. So what? Did those others have some kind of natural right to get the same treatment? None!

Consider – you go to the mall and there is a store decorated with stuff you really like, say, in your favorite color. So, you give them your business, although their wares aren’t so great and even their deals leave a lot to be desired, nor are the clerks very spiffy. But you still prefer to shop there – it pleases you.

Are you being fair to all those other stores where similar wares are sold but, alas, their aesthetics fail to please you? You are not – because fairness is simply irrelevant. You don’t owe those other stores a thing. You are fully justified in indulging your tastes and preferences – that’s the point of shopping, not to treat other folks fairly. They don’t have this coming to them since you never made anyone any promise to treat them fairly.

Ryanair is now suffering from the silly ideas of European Union socialists who believe that business is some kind of fair distribution process, whereby customers, vendors and the rest all have a first obligation to take care of everyone else regardless of their own priorities. It is as if we all had some kind of enforceable duty to shop with all other people’s interests in mind, not our own.

But that is bogus, a confusion of family values with commerce. Yes, when you feed your children you must take care that all have enough to eat. You went on record with that promise by having the kids in the first place. But you need not care about other people’s kids in the neighborhood, let alone about enriching every vendor at the mall.

Ryanair is the victim, along with many other businesses around the world, of this quasi-socialist approach to commerce whereby deals are expected to be struck on the model not of free exchange but of the regime of family obligations. The pursuit of that impossible dream can bring economies to ruin.

February 4, 2004

Tibor Machan [send him mail] holds the Freedom Communications Professorship of Free Enterprise and Business Ethics at the Argyros School of Business & Economics, Chapman University, CA. A Research Fellow at the Hoover Institution, Stanford University, he is author of 20+ books, most recently, Putting Humans First: Why We Are Nature's Favorite. He is co-author of A Primer on Business Ethics.

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