Ryanair facing competition probe

Ryanair is under investigation by the European Commission over cash benefits which may breach EU rules on fair competition.

Ryanair is under investigation by the European Commission over cash benefits which may breach EU rules on fair competition.

The Commission is looking into advantages Ryanair enjoys from operating out of Charleroi airport in southern Belgium, including reduced landing fees and other special rates which help the budget airline offer bargain-basement ticket prices to customers.

Announcing the inquiry, the Commission said that Ryanair gets exclusive arrangements from the Walloon Region to operate from the airport, and the airport management company, Brussels South Charleroi Airport (BSCA), gives concessions on ground handling prices, recruitment, training and subsistence costs and office space.

“In addition, BSCA makes a substantial contribution to the financing of a joint promotion and advertising enterprise which markets Ryanair’s services” said a Commission statement.

“In return for the advantages granted by BSCA, Ryanair has assumed certain obligations over a period of several years, which could safeguard the airport’s revenues.”

The investigation will focus on whether the benefits Ryanair enjoys for operating from Charleroi amount to a distortion of competition contrary to EU rules, or whether the arrangements are compatible with the principle of “the private investor in a market economy“.

The Commission statement added: “This formal investigation of the aid Ryanair may have received does not seek to question the development of low-cost activities, which respond to clear consumer wishes, but aims to ensure a level playing field for all airlines.”

Ryanair chief executive Michael O’Leary said his airline had “no concern” at any European Commission inquiry into alleged illegal state subsidies the airline might have received to help its operation at Belgium’s Charleroi airport.

Mr O’Leary said: “Ryanair have no concern about any formal or informal inquiries made by the EC into our successful operations at Charleroi.

“The general terms of our cost base at Charleroi airport are well known and are available to any other airline who chooses to fly there on a similar basis as Ryanair.

“The arrangements at Brussels Charleroi airport are competitive, non-discriminatory and available to all and we have no doubt that the commission will support Ryanair’s ongoing campaign to lower the otherwise ridiculous cost of air travel all over Europe.”

Today’s announcement follows an inquiry into Olympic Airways, which was ordered by the Commission today to pay back about 120 million in Greek government grants deemed to give the airline an unfair advantage over its rivals.

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