Ryanair has lodged an appeal against repaying the subsidies it received at Charleroi airport in Belgium, claiming the European Commission's ruling was a "flawed decision". Siobhán Creaton, Finance Correspondent, reports.
In Brussels yesterday, Ryanair chief executive Mr Michael O'Leary said it was a "Communist-type decision".
The airline claims the Commission's decision completely ignored the fact that the agreement between Ryanair and the airport arose after intense negotiations with several other airports.
The airline also claimed that it had similar and lower costs at private airports across Europe.
"The Commission's decision is seriously flawed and creates a very damaging precedent for under-utilised regional airports all over Europe.
"We are confident that this decision will be overturned by the European Court and that the successful partnership between low-fares airlines and regional airports will be vindicated," Mr O'Leary said.
In February, the Commission outlawed some of the subsidies Ryanair received from the Walloon government, which owns the airport, and ordered the airline to repay up to €4.5 million.
The Commission is due to present new guidelines on airport subsidies and all airline contracts this year. A&L Goodbody is representing Ryanair in the case. The airline expects the appeal could take up to two years to reach a conclusion.
Ryanair fears the Commission could use the Charleroi ruling as a precedent should it face similar challenges over its arrangements at airports across Europe.
Mr O'Leary said the Commission's stance was unfortunate. "After successfully liberalising the market for air transport, which ushered in an era of unprecedented competition and low fares for consumers, it appears to be playing into the hands of the struggling, former monopoly national airlines and monopoly hub airports, to protect them from competition," he said.
He contended that the Commission blatantly disregarded the private market investor principle. Mr O'Leary also reiterated that Ryanair would only choose to pull out of Charleroi if the hub's cost base "changes by one cent". A negative court ruling would not trigger a pull-out, he said.
Ryanair expects passenger numbers at Charleroi will remain flat at about two million in 2004. Mr O'Leary said the carrier expected to open two new European bases in 2005, one privately owned and one publicly owned.
The firm issues full-year profit figures next week and has warned investors they will be 10 per cent below expectations due to intense competition. The shares lost almost one-third of their value at the end of January when it issued the surprise profit warning and Mr O'Leary has said the shares are likely to remain at this low level for up to two years.
Ryanair shares fell 14 cent to €4.39 in Dublin yesterday.
