The European Commission is likely to rule that some advantages given by regional Belgian authorities to Irish low-cost airline Ryanair are illegal, an EU source said this afternoon.
If the 20 European Union commissioners follow the opinion of their staff, their decision - expected on February 3rd - will set a precedent for regional airports around the European Union.
Ryanair is the subject of an investigation by the EU executive into whether the airline received unfair state aid at its Belgian hub of Charleroi, some 40 km south of Brussels.
The source said the decision would be a balanced one which strikes down some of Ryanair's advantages but endorses others because the Commission is "in favour of development of low-cost companies and regional airports".
The source said the Commission must take into account complaints by rivals, in this case Virgin Express, against Ryanair for subsidies at Charleroi.
"There are certain advantages that can be accepted," the source said, such as paying for the costs of publicity, provided that it is for a limited period of time.
Belgium's Walloon region gave Ryanair 3.8 million euros in 2002 for publicity and to subsidise a few very low, highly publicised fares offered for a few seats on selected flights.
The source said the Commission would not accept the low landing fee of one euro per passenger charged to Ryanair.
"That is a big problem," said the source. Making matters worse, the favouritism to Ryanair is in an official decree by regional authorities.
The EU has banned most state aid to airlines since the early 1990s to help create a more competitive, deregulated market in which airlines like Ryanair and easyJet have thrived.
Ryanair has raised the ire of many established airlines as it has bargained for good deals from regional airports that are prepared to spend money to attract the business and holiday traffic the airline can bring.
The airport said it posted a profit for the first nine months of 2003, because its concession stands did good business from Ryanair passengers.
In November, Ryanair said that it had learned the Commission would conclude parts of its arrangements were unlawful and planned an appeal to the European Court in Luxembourg if that happened.
Ryanair accounts for virtually all the traffic at Charleroi. The airport said in its statement in December that total passenger numbers for the first nine months rose 46 per cent to 1.32 million.