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Ryanair rapped for state aid

(29 August 2003)

RYANAIR has insisted its route network is not under threat despite scrapping its Stansted to Strasbourg service after appeal courts ruled its subsidy deal with the French airport was illegal.

The Nancy Court of Appeal said a £1 million subsidy handed to Ryanair by the Strasbourg Chamber of Commerce and publicly owned Strasbourg Airport equated to state aid following a complaint by Air France.

The ruling adds weight to a separate European Commission investigation into handouts to the airline from Charleroi Airport and opens up the possibility of airlines or other airports making similar complaints against the 20 public airports Ryanair flies to in France and Italy.

A Ryanair spokesman said: “It does raise the possibility of further complaints against deals we have with other public airports, but we have not heard of any other pending action and it certainly will not mean our network in France will collapse.”

Tarbes Chamber of Commerce is also aggrieved by Ryanair’s deal with nearby Pau Airport but is yet to issue an official complaint.

Air France and Alitalia both indicated they have no intention of making any further complaints, while Lufthansa refused to comment.

Ryanair will stop its Strasbourg service on September 24, replacing it with daily flights to nearby Baden Baden Airport in Germany.

It decided to pull the route after the appeal court failed to respond to an ultimatum to delay its decision over the Strasbourg subsidy.

Ryanair chief executive Michael O’Leary said: “It is wrong for state-aid rules to be misused by high-fare flag carriers to limit competition, consumer choice and lower fares.”

Ryanair said it expects to carry 200,000 passengers a year to Baden Baden, which will serve the Wurttenburg area of Germany and Alsace region of France, with prices starting from £10 one-way.