European regions plead for Ryanair

An alliance of European regions warned today that y imposing hefty EU fines on Irish low-cost airline Ryanair for receiving illegal subsidies will end up damaging regional economies across the continent.

“The public will be astonished, when they see how many regions are profiting from the concept of low cost-cost carriers by joining underused regional airports,” the Association of European Regions said in a statement.

On February 3, the European Commission will likely rule budget Ryanair has received illegal discounts from the airport at Charleroi, south of Brussels, and force it to repay ”millions” of euros, James Callaghan, Ryanair’s director of regulatory affairs, said this week.

He also said the EU will limit his company’s cut-rate contracts with airports to only three years.

Ryanair runs cheap services to and from secondary airports at rates well below those of conventional carriers.

Like all low-cost operators, Ryanair is a lifeline, Onno Hoes, head of AER’s regional aviation working group, said in a statement.

Fining it could drive business from “regional airports with an enormous impact on our regional development plans, e.g. for the development of small business and tourism."

“It could threaten the cohesion of Europe looking at the fact that the present and the new routes planned by Ryanair and other carriers are direct connections between regions and not only between capitals and industrial centres.”

The AER represents 250 regions from 26 European nations. It said it is concerned that a “strict application of competition regulations will seriously infringe the ability of the regions to organise their transport services.”

The EC has been investigating if Ryanair received illegal subsidies from publicly owned Brussels South Charleroi airport.

Ryanair now receives discounts worth more than €1m a year in its 15 year contract, according to Callaghan.

The outcome of the EU probe will be crucial to the future of Europe’s fast growing, low-cost airlines that are luring passengers away from big carriers in large numbers.

Ryanair says the breaks it gets at Charleroi were offered to other airlines, too. It also argues it would have to raise fares without them.

For its part, the Charleroi airport has said that, thanks to Ryanair, it became profitable in the first half of 2003, two years earlier than foreseen.