Airport in EU Ryanair case may be sold

THE Belgian region of Wallonia, facing charges it gives illegal aid to Ryanair at a local airport, said selling the site to private investors was one possible way to resolve the dispute with the European Union.

The EU is probing whether a 2001 accord between Ryanair, Europe's No 1 low-cost airline, and Belgium's state-owned Charleroi airport includes illegal state aid. The 15-year agreement includes discounts on landing fees and marketing aid.

"Privatisation could be a solution," Serge Kubla, the Walloon government's vice president and economy minister, said at a press conference in Brussels.

Ryanair, the only airline that operates daily from Charleroi, carried 95% of the airport's 1.8 million travellers in 2003. The airport expects travellers to increase to two million in 2004.

The European Commission will rule within weeks on the legality of reduced landing fees granted to Ryanair by the French- speaking region of Wallonia and a pledge to compensate the airline for losses resulting from changes in airport taxes and opening hours.

The EU's competition watchdog is also scrutinising aid the carrier receives from the airport's publicly-owned management company.

EU rules prohibit state aid that distorts or threatens to distort competition in the 15-nation bloc by favouring specific companies. Virgin Express, a no-frills carrier that operates from Brussels Zaventem airport, says Ryanair is unfairly undercutting other airlines.

The Walloon government is seeking investors in Charleroi airport with the help of Bank Degroof, which has identified about 10 interested parties, Mr Kubla said.

Ryanair pays a landing fee at Charleroi of €1 per passenger about half the official rate and has secured aid of more than €1m for recruiting and training crew and meeting hotel and living expenses for staff.

Ryanair chief executive Michael O'Leary, repeating comments he made last November, said he would abandon Charleroi and pick a replacement airport outside Belgium if the EU ruling raises costs at Charleroi.

O'Leary, who attended the press conference with Mr Kubla, said as many as four airports were candidates to replace Charleroi, up from two in November.

Bloomberg

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