Ryanair may lodge series of EU complaints

Ryanair will lodge a flood of complaints against rival airlines and private airports if it is singled out in a European ruling tomorrow.

Leaked details of the report from the European Commission on subsidies received by the low-cost airline from Belgian regional airport Charleroi indicate that Ryanair could be forced to repay anything from €2 million to €7 million to the Walloon government which runs Charleroi in respect of reduced landing fees, marketing and ground handling fees.

Ryanair believes an adverse ruling will leave a number of other airlines, including some flag carriers, exposed to similar retrospective payments. "Repayment here could force all of Europe's airlines and airports to retrospectively make repayments as similar arrangements to Charleroi are commonplace in almost every member-state," the airline said in a statement.

"It should not be an issue of us having to take action against other operators or airports," said Mr Michael Cawley, deputy chief executive of Ryanair. "If the decision forces Ryanair to pay back so-called illegal aids, we are calling on the European Commission to issue a statement that all European airlines will likewise be forced to pay back such 'state aids'."

However, if this did not happen, Ryanair would make complaints against every airline and publicly-owned airport that either gave or received discounts. "If there is an unacceptable decision, Ryanair will not only appeal it but has instructed its advisers to initiate state-aid cases and complaints against every other airline flying into every state airport which offers concessions and discounts," he said.

While the reduction in landing charges and ground handling fees are declared completely incompatible with European state aid law, the decision also imposes tight conditions on other benefits. These must be linked to the opening of new routes, may not exceed 50 per cent of the overall value of the costs and may not run for longer than three years.

Among those likely to feel the heat, according to Ryanair, are flag carriers Aer Lingus and Lufthansa. It highlights the six-year, new-route discounts under which Aer Lingus is opening 12 new routes from Aer Rianta airports in Dublin and Cork and the €3.8 million annual subsidy paid by Leipzig Airport to German carrier Lufthansa as arrangements that would be challenged.

Ryanair and the European Low Fares Airline Association, of which it is a member, say the Commission decision will make it much more difficult, if not impossible, for publicly-owned airports to compete on a level playing field for new routes and traffic growth.

The Assembly of European Regions said the Commission "has to be aware there is a reg- ional and inter-regional dimension" to the ruling. It argues the development of low-cost carriers using small regional airports "has allowed, in particular, small and medium enterprises to get access to the international market at reasonable costs".

"The decision of the Commission could lead to the abandonment of regional airports with an enormous impact on our regional development plans," it added.

Ryanair has raised the possibility of pulling out of Charleroi. "If the Commission decides to seek full recovery, Ryanair will be forced to review the viability of continuing operations at Charleroi and other state airports which it uses, and as a consequence Belgian and European consumers will pay higher fares, or even have services discontinued," it said. - (Additional reporting: Reuters/Financial Times Service)