Airline wins landmark ruling on subsidies

RYANAIR has won a landmark case confirming it can conclude deals with state-owned airports that give it highly preferential rates and conditions.

The ruling by the European Court in Luxembourg on Ryanair’s agreement with Charleroi airport near Brussels also means Europe’s largest low fares airline will get to keep over €4.5 million frozen for the last four years.

A jubilant Michael O’Leary said he believed the decision would mean the demise of similar cases involving eight other regional airports used by Ryanair.

He held out an olive branch to the European Commission, acknowledging he had made mistakes in dealing with them in the past.

Mr O’Leary said: “We have learned from our mistakes and we are looking to build a better relationship with the commission.”

Charleroi was Ryanair’s first continental base and the airline concluded an agreement with its owners the Walloon Region that gave them a 50% reduction in landing charges and compensate them for any profit lost as a result of a change in airport charges in the future.

Under the terms of a second agreement, Ryanair agreed to base up to four aircraft at Charleroi and to operate at least three flights a day per aircraft over 15 years. The Brussels South Charleroi Airport (BSCA), a public sector company controlled by the Walloon Region that manages the airport, agreed to contribute towards Ryanair’s costs in setting up its base in Charleroi and to charge them €1 per passenger for ground handling services rather than the €10 advertised rate.

The court ruled that: “The commission’s refusal to examine together the advantages granted by the Walloon region and by BSCA, and to determine whether, taken together, those two entities acted as rational operators in a market, is vitiated by an error of law.”

The European Commission said the judgement referred to the methodology used by the commission in not treating the Walloon regional authority and their company that runs the airport separately. They therefore believed the ruling would not have an immediate impact on nine other pending cases, some of which involve airports used by Ryanair.

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