Consumers to pay for Ryanair ruling

Ryanair is set to appeal the long-awaited EU order to partially repay millions of euro in subsidies it received from Charleroi airport in Belgium.

The airline says the decision threatens low cost flights.

Estimates put the penalty for the company at nearly €4m - about half the cash aid agreed from Charleroi in a business proposition for the low-fare airline.

It will also have to renegotiate the terms of the 15-year deal it had agreed at Charleroi which could raise its costs.

The benefits it receives in terms of marketing and other supports from the airport will also be curtailed to run for a maximum of five years rather than 15.

About one-fifth of the airports used by Ryanair are publicly-owned and the ruling is likely to force it to pay more to use these airports in the future.

Ryanair has indicated that it will not absorb these increases but the ruling will make it more expensive for consumers to fly to Charleroi with Ryanair.

Chief executive Michael O'Leary said: "It's impossible to envisage the Commission preventing McDonald's negotiating discounts from its suppliers to lower the cost of its meals to consumers. Why should the Commission do it to us?

"We will appeal and I am sure we will win against the high cost airport and high cost airlines."

He said the issue at stake was principle, and that Ryanair had done nothing wrong and would continue to reduce costs to benefit consumers.

The Commission denied it was hitting cheap fares and consumer choice.

EU Transport Commissioner Loyola De Palacio said the decision would encourage the development of low cost airlines on low cost routes.

Ryanair argues that by flying to small, barely used airports, it is actually helping the local economy by offering jobs and an influx of tourist spending.

It says that more than compensates for any benefits it may receive from the local community.