Financial News

  • 24 July 2014, 15:11

Ryanair Told To Pay Back ?9.6m In State Aid

Ryanair is facing a legal battle with the European Commission after it was ordered to repay almost ?10m (£7.9m) in what was found to be illegal state aid.

The no-frills carrier said it had instructed its lawyers to challenge the Commission's findings in relation to three French regional airports.

Its operations at three German airports were cleared by the inquiry.

The Commission, the European Union's executive arm, said Ryanair would have to repay ?868,000 (£686,310) related to rebates and marketing arrangements negotiated at Angouleme airport in central France, from where it had ceased operations in 2009.

It found Ryanair had enjoyed "an undue advantage" and should repay the money so as to "remove the distortion of competition".

Similar findings at Pau Pyrenees airport, which Ryanair stopped using in 2011, required a repayment of ?2.4m (£1.9m), with ?6.4m (£5.06m) repayable at Nimes airport.

An investigation into Austria's Klagenfurt airport, where airport service and market agreements "appeared to be excessively favourable to Ryanair and therefore could involve incompatible state aid", was continuing.

The airline responded with a statement welcoming the rulings concerning Germany.

Ryanair's director of legal and regulatory affairs, Juliusz Komorek said: "Today's decisions confirm that Ryanair's airport agreements at Niederrhein Airport comply with the EU state aid rules.

"Following the closure of this case and the earlier six positive decisions at Aarhus, Bratislava, Charleroi, Marseille, Berlin Schonefeld and Tampere airports, we will immediately appeal the decisions in (the) Pau, Angouleme and Nimes cases, where the EU Commission mistakenly suggested the airports' agreements with Ryanair did not fully comply with the EU state aid rules.

"Ryanair has to date carried 86.5 million passengers at the seven airports where our commercial arrangements have been confirmed by the EU Commission and the EU Court to comply with EU law, compared to just 3.4 million passengers at the airports where the Commission today suggested the agreements did not comply with state aid rules."

It is not the first time Ryanair has fallen foul of the authorities over the past 12 months.

In October, the operator was ordered to pay fines and damages totalling £6.7m by a French court, which accused it of violating the country's labour laws.

It denied registering workers employed in France as Irish employees, preventing workplace councils from functioning and preventing access to unions.

However, the airline has also prioritised a more customer-friendly approach after coming under fire on issues including charges, compensation and baggage fees.

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