easyJet loses out in PSO ruling

15th May 2006

easyJet has been informed by the regional administrative court of Lazio that the
airline will not be allowed to operate flights from Milan to Olbia for the time
being, despite the companies view that this is an abuse of the Public Service Obligation status by
the Italian Transport Ministry and by ENAC. Arnaldo Munoz, General Manager Commercial for Southern Europe, said today:

“We find it astonishing that the court blocks flights by easyJet and Ryanair to
Sardinia, while Alitalia is invited to fly. The European Commission is already
investigating the Decree, and we are confident that Commission will soon end this
abuse of these subsidised monopolies in Italy.


“Meridiana, AirOne and Alitalia will continue to share a nice, rich cake presented to
them on a silver plate by ENAC and the Transport Ministry. But it is the people of
Sardinia and the Italian taxpayer who have to foot the bill. We have always been
against the PSO system and have refused to become part of a deal - we believe that
airlines should offer the best service and the best fares to customers and leave it
up to them to make their choice.



“As the President of the Italian Competition Authority Antonio Catricalà stated this
week, the Italian aviation market suffers from the absence of competition and
stopped changing 10 years ago when liberalisation hadn’t even started in Italy. He
couldn’t be more spot-on.


“The PSO system is widely and increasingly abused in a number of countries as state
aid through the back door, and its beneficiaries cynically try to sell it as
something that is in the people’s interest. This is an insult to passengers’
intelligence: How can high fares and a waste of tax-payers money be in the people’s



The Court decision forces easyJet to cancel all flights between Milan and Olbia for
this year. All passengers will be informed and will be offered a reimbursement. The
free capacity will be used to provide additional services to the hugely successful
destinations of Naples and Ibiza.


The Italian authorities blocked easyJet’s flights from Milan to Olbia by imposing a
PSO Decree on all important routes between mainland Italy and Sardinia. ENAC even
unlawfully blocked the flights after easyJet announced to operate them for free,
although the legislation clearly states that the PSO Decree can only apply to
flights “for remuneration”.



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