The European Commission will today decide whether Ryanair must repay state aid it received to use Charleroi Airport in Belgium, write Denis Staunton, Dominic Coyle and Derek Scally
Commission sources have said that, at worst, its ruling would equate to a rise of between 6 and 10 per cent in the price of Ryanair tickets. For its part, the airline has said that it threatens the viability of low-cost airlines and the airports such operators use.
The ruling is the culmination of a two-year dispute between the airline and Brussels, which yesterday saw the President of the European Parliament, Mr Pat Cox, intervene on the side of the Irish airline.
In a letter to the President of the Commission, Mr Romano Prodi, copies of which were sent to the other 19 commissioners, Mr Cox urged the Commission to take account of the "possible knock-on effects and implications that a precedent set by this particular case might have for regional airports, regional development, consumer preference and service provision".
The Transport Commissioner, Ms Loyola de Palacio, last night remained determined to order the Belgian regional government of Wallonia to recoup from Ryanair the value of subsidies judged illegal.
"The Commission's proposed decision will reverse 20 years of competition, deregulation and low-fare air travel, and consumers will suffer higher fares, less competition and less choice," Ryanair said in a statement.
Ms de Palacio believes that a majority in the Commission support her proposal, but she will face tough resistance from a number of commissioners who fear that the move against Ryanair could damage the low-cost airline sector in Europe.
A meeting of the 20 commissioners' top political advisers yesterday saw increased opposition to Ms de Palacio's plan, and officials last night declined to predict the outcome of today's meeting.
Ms de Palacio argues that Ryanair's reduced landing charges and baggage-handling fees at Charleroi amount to illegal state aid, and that the subsidy should be repaid. She also wants to reduce the duration of other benefits Ryanair receives from 15 years to three years and has drawn up strict conditions as to how such benefits can be given.
Some commissioners, including Ireland's Mr David Byrne, fear that the legal and commercial consequences of the decision have not been fully considered. Ms de Palacio could agree to making some of her proposed conditions more flexible, but she will resist any move to postpone a decision on Ryanair beyond today.
Although there is little sympathy for Ryanair within the Commission, officials acknowledge that any move against the airline could be seen as an assault on low-fare airlines. In view of the noisy campaign by Ryanair, however, the Commission will not wish to appear to have bowed to pressure from a commercial company in applying EU law.
Ryanair was quick to point yesterday to Mr Cox's letter as evidence of growing support for its position.
Mr Cox last night denied that his unusual decision to write to the Commission had anything to do with the fact that Ryanair was an Irish company. Speaking to The Irish Times during a visit to Poland, he said that he was not making representations on behalf of Ryanair but, if anything, on behalf of regional airports.
"As my letter made clear, this is none of my business," he said, adding that he merely hoped to appeal to the Commission to "look at the broader picture" surrounding regional subsidies to airlines flying to regional airports and to "factor in other issues when considering the tension between the dynamics of subvention".