French regional aid to Ryanair ruled illegal

11th May 2005, Comments 0 comments

PAU, France, May 11 (AFP) - A French court ruled Wednesday that funds given to Irish low-cost airline Ryanair by the chamber of commerce in the southwest French city of Pau were illegal, demanding the cancellation of the aid package.

PAU, France, May 11 (AFP) - A French court ruled Wednesday that funds given to Irish low-cost airline Ryanair by the chamber of commerce in the southwest French city of Pau were illegal, demanding the cancellation of the aid package.  

The ruling was the latest in a series of court decisions against Ryanair, which has received subsidies from regional and local governments across western Europe in a bid to encourage the airline to fly to smaller cities.  

The Pau chamber of commerce had offered Ryanair EUR 80,000 (USD 103,000) in exchange for the opening of a link between the French city and London's Stansted airport.  

The chamber subsequently offered the airline 11 euros per passenger, with an annual ceiling of EUR 400,000 in aid "in exchange for actions aimed at increasing the prestige of the city of Pau".  

Ryanair was also granted preferential rates for landing fees and ground-handling charges, according to the complaint filed by Air Mediterranee, which charged it was facing unfair competition.  

The Pau administrative court ruled that the subsidies were illegal as they had not been first reported to the European Commission.  

Both Ryanair and the Pau chamber of commerce said the court has merely pointed out "procedural errors", with the chamber adding that it would redraft its contract with the Irish airline.  

Like other no-frills airlines, Ryanair has built its business on negotiating favourable deals with far-flung airports that charge much less than the main hubs in Europe's big cities.  

The European Commission ruled in February 2004 that some of the state aid paid to Ryanair by the publicly-owned airport in Charleroi, south of the Belgian capital Brussels, was illegal.  

The airline appealed to the European Court of Justice - and lost.  

The French courts have barred public subsidies to Ryanair in support of its Strasbourg-London service.

© AFP

Subject: French News

0 Comments To This Article