Ryanair to appeal Charleroi ruling

RYANAIR plans to appeal a ruling by the European Commission that the airline received illegal financial subsidies from Charleroi airport in Belgium.

The commission ruled earlier this year that the support given to the airline by the Walloon local authority, which owns Brussels Charleroi airport, went against EU rules. It said the contract should be restructured and ordered the airline to pay back the money.

Ryanair said it will appeal to the European Court of First Instance requesting the "flawed" decision be overturned.

The airline said the commission did not take into account several factors when making its ruling in February. Ryanair claimed the EU failed to look at evidence vital to the judgment and that the deal was available to any airline and not just the Irish carrier.

It also said the commission "failed to apply the Market Economy Investor Principle (MEIP), which is the test for proving that a public company was acting in the same way as a private investor would have in the same circumstances".

But the commission found the deal, where Ryanair received a 50% discount on landing fees and other financial aid was in breach of state aid rules.

Ryanair chief executive Michael O'Leary said yesterday that the original findings by the EU played into the hands of struggling monopoly airports and airlines and left passengers facing higher fares.

"Ryanair has pioneered the low fares model of offering direct, point-to-point low-fare air services to and from under-utilised regional and secondary airports all over Europe. This has enabled us to offer fares at a fraction of what the high fare, rip-off airlines have been forcing on consumers for years.

"Now that Ryanair has become a major competitive threat to the dinosaur national airlines and monopoly airports, they have begun to misuse the state aid rules and use other dirty tricks to prevent competition and raise fares to consumers," Mr O'Leary said.

He added Ryanair expects to report a 10% fall in profits when annual results are released at the start of June. He said profits would come in at about €215 million as an intense price war to fill seats hit profit margins.