French government sued over airline state aid

French government sued over airline state aid

France is being sued by the European Commission for failing to recover almost €10 million in illegal state aid to two budget airlines.

Most of that amount is owed by Ryanair and its marketing subsidiary Airport Marketing Services (AMS), the Commission says.

Ryanair and Dutch carrier Transavia had rebates and marketing deals at three airports - Pau, Nimes and Angouleme.

The carriers therefore paid less than they should have for using the airports.

The Commssion said that “through various contractual and marketing arrangements with the airports, the airlines paid less than the additional costs linked to their presence in the airport.

“The airlines had therefore benefitted from an undue economic advantage, which has to be recovered to remedy the resulting distortion of competition”.

Ryanair no longer flies to Pau or Angouleme.

France was told a year ago to recover nearly €10 million from Ryanair and Transavia. The case of Transavia concerned only €430,000 due for a deal at Pau airport.

France failed to meet a four-month recovery deadline, because Ryanair appealed against the move.

But the Commission says France's suspension of efforts to recover the funds contradicted European case law. It is now taking the case to the European Court of Justice.

The Commission said: “In particular, the Commission decisions required France to recover €0.87 million for Angouleme (from Ryanair and AMS jointly), €2.8 million for Pau (€0.42 million from Ryanair, €1.97 million from Ryanair and AMS jointly and €0.43 million from Transavia) and €6.3 million for Nimes (from Ryanair and AMS jointly).

“Member states have to recover state aid that has been found incompatible by the Commission, within the deadline set in the Commission decision.

“This is very important because delays in the recovery of unlawful subsidies maintain the distortion of competition created by the aid.”


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