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Ryanair: 'EC will find Brussels deal illegal'

(14 November 2003)

RYANAIR has admitted its deals with state-owned airports will be open to attack after conceding the European Commission will find “substantial” parts of its agreement with Brussels Charleroi Airport illegal.

In an unusual show of weakness, Ryanair declared it will pull out of its Belgium base if the EC finds against the deal and warned it could threaten the whole ethos of low-fares travel.

Ryanair receives a large discount on landing fees and marketing cash from the airport and the Walloon government, but the EC is likely to rule this contravenes state aid rules after a complaint from the main Brussels airport. 

This could lead to similar complaints from private airports or competitor airlines about Ryanair’s deals with its 19 French public airports and Italian, Spanish and German airports.

A spokesman said: “It leaves us open to me-too cases - we’ll have to wait and see. We’ve seen other airlines keen to challenge Ryanair’s deals after the Air France case in Strasbourg.”

The carrier said it would appeal against the EC’s decision and talk to the airport and Walloon government about possibly privatising Charleroi. If neither works, it will pull out and move to another privately-owned European airport. 

Ryanair chief Michael O’Leary claimed a negative ruling could put EasyJet, MyTravelLite and Bmibaby deals in doubt.

“If the EC finds against us it will mean a return to high fares and less choice as publicly-owned regional and secondary airports will not be able to compete openly and fairly.”

But independent aviation analyst Chris Tarry disagreed.

“It may add a few euros to the price but Ryanair can absorb the initial blow by building its ancillary product range, such as advertisers on its website.”

The EC refused to comment.