October 13, 2010 / 4:05 PM / 9 years ago

UPDATE 1-Ryanair ditches Marseille base in row over pay

* Follows commencement of legal proceedings by France

* Will cease 13 out of 23 Marseille routes

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DUBLIN, Oct 13 (Reuters) - Irish airline Ryanair (RYA.I) said on Wednesday it would close its only French base at Marseille Airport from January next year following a dispute with French authorities over how its workers are paid.

Europe’s biggest low-cost carrier effectively treats the 200 pilots and cabin crew it has working in Marseille as Irish employees — receiving their pay from Ireland and paying their tax and social insurance contributions to Ireland.

Ryanair said its flight crews work on Irish registered aircraft which is defined as Irish territory and, therefore, comply with the European Directive on Transport Workers which requires all mobile transport workers to pay income tax and social insurance in the country in which they work.

French authorities say the flight crews should pay income tax and social insurance in France, rather than in Ireland and have commenced legal proceedings over the issue.

“We are very disappointed at this decision by the French authorities to initiate proceedings against Ryanair’s base in Marseille, which complies fully with EU regulations for mobile transport workers,” the airline’s chief executive Michael O’Leary said in a statement.

The company’s four Marseille based aircraft will be moved to competitor airports in Spain, Italy and Lithuania.

Ryanair will cease operating 13 routes out of Marseille on Jan. 11 but will continue to operate 10 routes from the city using aircraft and crews which are based elsewhere.

Reporting by Matt Scuffham; editing by Elaine Hardcastle

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