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Monday 18.06.2018 | Name days: Madis, Alberts

Šlesers’ actual role in the signing of contract with Ryanair is revealed

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUDetails regarding the signing of the unfavourable contract between Ryanair and Riga International airport have surfaced in the London Court of International Arbitration.

On top of that, information regarding Ainārs Šlesers’ actual role in the signing of the questionable contract between Ryanair and Riga International airport, and that of other officials, has also surfaced in the London court, as reported by Pietiek.

Šlesers was the one who extended the proposal to Ryanair to include a single agreed fee in the contract. This is demonstrated e-mail correspondence between Šlesers and Ryanair over the course of summer 2003 – spring 2004.

The Corruption Prevention and Combating Bureau had previously unsuccessfully investigated Šlesers’ role in the contract’s signing process. Šlesers always claimed that even though the contract guaranteed lower service costs for Ryanair flights, it would only benefit Latvia’s economy by increasing the number of serviced passengers and developing Latvia’s tourism sector.

Based on testimony from current and former officials and previously unpublished e-mail correspondence of Šlesers’ political office, Ryanair and Riga International airport, Latvian lawyers informed the London court that the airport’s Board had opposed the signing of the contract with Ryanair, because they knew it would lead to considerable losses.

The court of arbitration had basically agreed that it was Šlesers, not the airport’s Board, who was the main driving force of the signing of the contract. This did not, however, affect the court’s ruling. It was decided that the contract is in force and is to be interpreted in favour of Ryanair.

The airport’s position in the court of arbitration was that ‘Šlesers personally headed talks about conditions of the contract and made the airport sign it’. Because Transport Ministry is a holder of shares in Riga airport, it has legal and practical means of exacting influence on the airport in order for the latter to accept conditions agreed upon by Ryanair and Šlesers. The airport’s Board had no other choice but to follow Transport Ministry’s order to sign the contract in 2004.

Andis Damlics, who was and remains a member of the airport’s Board, testified in the London court that Šlesers was directly involved in talks with Ryanair. He added that the airport’s Board had opposed multiple conditions of the contract.

In spring or early summer of 2004, Transport Minister Šlesers’ office had sent the airport a project of the contract, giving a political order for the airport to sign it. A meeting was held shortly after receiving the contract. During this meeting, Šlesers, the management of the airport and Ryanair administrative director David O’Brian reached an agreement regarding several amendments to the contract’s conditions. However, some time later the airport received a new version of the contract. As it turned out, it did not include a single one of the previously agreed upon amendments and was no different from the initial version of the contract.

On June 27th, 2003, then the Commercial Director of Ryanair Conan henry wrote to Šlesers, expressing his satisfaction with their meeting in Dublin. He also expressed his interest in performing Ryanair flights to Riga. However, before the project could progress, he requested a written approval of Ryanair’s commercial conditions (thуy were added to the letter he sent to Šlesers). This was followed up by a meeting with Šlesers on November 7th, 2003, dгring which the two sides discussed flight routes, dates and costs.

Following talks that lasted for months, one final meeting between Ryanair management and Šlesers was held in Riga on April 23rd, 2004. After this meeting, David O’Brian wrote to Šlesers that Ryanair agreed to ‘his offer regarding a single „all inclusive” fee of EUR 4.5 per passenger’.

On May 14thm 2004, Šlesers sent a proposal to Ryanair regarding a project with airport costs. In letter sent a bit later, Šlesers extended an offer to Ryanair to make Riga its base if the airline can guarantee 500,000 passengers a year.

The court process also reviewed a correspondence between Damlics and Ryanair manager David Usher, which took place in between July 9th- 15th, 2004. In this correspondence, the airport’s representative expressed concern over the fact that air navigation services in the terminal zone were also included in the contract. This angered Ryanair, and on April 22nd Usher wrote to the airport’s Board, adding Šlesers as one of the recipients as well, noting that ‘the last document sent by Ryanair does not fully comply with the agreement that was reached in Šlesers’ office on July 7th’.

The inclusion of air navigation service costs in the single price was the main reason for the court process. According to the documents that surfaced during the court process, the inclusion of these costs was done with Šlesers’ direct involvement. The airport opposed doing this.

The London arbitration court concluded that Šlesers’ involvement in talks regarding contract conditions and the airport Board’s opposition of them shows that Transport Ministry was ‘more than a supervisor’. There is plenty of evidence to suggest Šlesers played a very active role in talks, as concluded by the court.

Ryanair management tried to justify the airport’s position, because representatives of the airport had signed the contract against their free will. Ryanair representatives had tried to reduce the impact of Šlesers’ influence over the contract – the minister’s active involvement only reflects the general desire of politicians to associate with this important business sector in order to gain political points. The airport’s position in the court was that Šlesers was the one who ordered the airport around and that his role was more than just coordinating the process.

Šlesers’ office had also coordinated amendments to the contract in autumn 2007. The court of arbitration also reviewed an e-mail that was sent by Šlesers’ advisor Natālija Džeina Maršāne to Ryanair executive director’s deputy Michael Cowley, offering changes to the structure of payments, which later led to amendment to the contract.

Therefore, on December 10th, 2007, there was a new contract that discriminated other airlines and offered additional benefits for Ryanair. This new contract stated that the airport is to cover the difference if Ryanair’s costs per passenger exceed the already low amount of EUR 4.5. November and December of 2007 were politically unstable. Under Aigars Kalvitis’ government, Šlesers was once again Transport Minister. Although this government was nearing its end and Šlesers had managed to remain in his post in Godmanis’ government, there were risks during preparations of amendments to Ryanair contract that political succession in Transport Ministry would not be followed.


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