Blow to Ryanair as court rules subsidies ‘illegal’

A FRENCH court has dealt a blow to Ryanair with a ruling that subsidies given to the airline by the chambers of commerce in the city of Pau were illegal.

The Pau-Bearn Chamber of Commerce had given the carrier €80,000 to support the opening of a route to London’s Stansted Airport from the city in the south-west of France. The deal was changed to a fee of €11 per passenger up to a limit of €400,000 a year.

In addition to the money, the airline also got a cheap landing fares deal at the airport and other benefits including preferential rates for ground-handling charges.

The chamber said the deal with Ryanair was “in exchange for actions aimed at increasing the prestige of the city of Pau.”

However, the court ruled yesterday that the aid to Ryanair was illegal and it must be stopped within two months or the Chambers of Commerce will be fined €1,000 a day until it complies with the decision.

The complaint against Ryanair was taken by its rival Air Méditerranée, which claimed the Irish airline was receiving unfair assistance.

Ryanair said yesterday it would redraft the contract with the Pau chamber and consider expanding its services to and from the city.

A spokesperson for the airline claimed the case had been brought by Air Méditerranée in a bid to block competition.

Michel Brau, president of the Pau/Bearn chamber, said in a statement: “We are pleased to reconfirm our commitment to developing low fares services in Pau Airport and will shortly redraft the contract with Ryanair in order to reflect the findings of the [court]. In the meantime, there will be no interruption to Ryanair’s services on the London route and we look forward to welcoming more low fares routes to Pau Airport.”

Yesterday’s ruling is the second time Ryanair has lost a state aid case. Last year, the European Commission ruled that Charleroi Airport in Brussels had breached EU law by giving several million euros in support in return for Ryanair setting up a base at the airport.