Ryanair wins and loses on State aid

By Doug Newhouse |


Ryanair has welcomed an EU Commission State aid ruling at Germany’s Niederrhein Airport, but is fighting rulings to return €10m ($13.43m) at three French airports.

 

The world’s largest international scheduled airline says that the EC’s ruling that its contract with Niederrhein-Weeze Airport complies with State aid rules ‘is consistent’ with previous decisions that Ryanair’s airport agreements with Aarhus, Bratislava, Charleroi, Marseille, Berlin Schönefeld and Tampere airports are lawful.

 

In a statement, Ryanair not surprisingly adds that all of its ‘airport arrangements comply with the EU State aid rules’ and says it has instructed lawyers to appeal against rulings which ‘erroneously allege otherwise’ with regards to the French airports of Pau Pyrénées, Angoulême and Nîmes. The European Commission made its decision known in a MEMO dated 23 July, 2014 (Brussels) and also in a subsequent press statement.

 

This stated the following: “The European Commission has adopted six decisions concerning public support granted to airports and airlines in France and Germany. The decisions are based on the Commission’s new guidelines on state aid to airports and airlines (see IP/14/172) adopted in February 2014 as part of its State Aid Modernisation (SAM) strategy.

 

 

Joaquín Almunia, Vice-President of the European Commission at a dedicated press conference on state aid for airports and airlines held earlier this year in Brussels.

 

 

COMPATIBLE AND INCOMPATIBLE STATE AID…

“The Commission has taken into consideration the importance of regional airports for local accessibility and economic development as well as the need to preserve a level playing field in the sector. The Commission has approved the state aid granted to the airports of Dortmund, Leipzig Halle, Niederrhein-Weeze, Pau, Angoulême and Nîmes, and found it to be in line with the Commission’s guidelines.

 

“However, in the cases of Pau, Nîmes and Angoulême, the Commission has concluded that Ryanair, and, in the case of Pau, Transavia, received state aid which is incompatible with EU rules. The Commission’s analysis has demonstrated that these airlines paid less than the additional costs linked to their presence in the airport.

 

“These airlines therefore benefited from an undue economic advantage, distorting competition in the Single Market. France must now recover the incompatible aid from the companies that received it in order to restore the level playing field.”

 

Commission Vice President Joaquín Almunia in charge of competition policy said: “EU state aid rules in the aviation sector allow public authorities to grant support where it is justified, namely where it improves the accessibility of a region and meet citizens’ transport needs. However, taxpayers’ money should not be used to grant an undue advantage to certain airlines, distorting competition in the Single Market”.

 

 

Joaquín Almunia, Vice-President of the European Commission.

 

 

RYANAIR COMMITS TO FIGHT RULINGS

Commenting on the ruling in late July, 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 (Market Economy Investor Principle).

 

“Following the closure of this case and the earlier six positive decisions at Aarhus, Bratislava, Charleroi, Marseille, Berlin Schönefeld and Tampere airports, we will immediately appeal the decisions in Pau, Angoulême and Nîmes cases where the EU Commission mistakenly suggested that the airports’ agreements with Ryanair did not fully comply with the EU State aid rules.”

 

Amongst the charges, the Commission has ruled that Ryanair must repay €6.4m ($8.5m) in relation to operations at Nîmes Airport; a further €2.4m ($3.2m) to Pau Pyrénées Airport and around €865,000 ($1.1m) to Angoulême Airport.

 

Meanwhile, Ryanair recently reported a first quarter net profits of €197m ($264.6m) and a traffic increase of 4% to 24.3m as load factors rose to a healthy 86%. Ryanair CEO Michael O’Leary said the airline is expecting to carry 86m passengers this year.

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