Airlines forced to repay illegal state aid

Airlines forced to repay illegal state aid

Ryanair is one of three airlines ordered to repay millions of euros given in illegal state aid after Europe’s anti-trust regulator found that contracts breached regulations.

The Irish budget airline must pay back its share of nearly €13 million.

Ryanair was ordered to return €2 million to Austria after receiving the cash from the state-supported Klagenfurt airport, which was prepared to lose money to attract big airlines.

German carriers HLX and Tuifly will have to pay back €9.6 million and €1.1 million, respectively, for similar agreements, The Times reported.

The European Commission found that certain airport services and marketing agreements had given the airlines an “unfair advantage, which cannot be justified under EU state rules”.

The decision means that Ryanair, which stopped flying to Klagenfurt three years ago, has been ordered to pay nearly €12.5 million for breaches of the rules at various airports since 2014.

Ryanair said that it would appeal against all the fines.

Klagenfurt, which last year averaged only 12 flights a day and had lower passenger numbers than Sumburgh airport in Shetland, offered deals to carriers, including discounts and fees for marketing services, to attract more tourists.

The commission found that contracts with Ryanair and Tuifly could not have brought in more revenue than the additional costs.

“As no profit-driven airport manager would have concluded such loss-making agreements, they amount to state aid to the airlines,” it said.

“Moreover, the agreements simply reduce the operating costs of the airlines, without contributing to common transport objectives. These agreements therefore distort competition in the single market in breach of EU state aid rules.”

Ryanair said that the commission previously had approved agreements at numerous airports and that the same rules should apply to Klagenfurt.

“We disagree with the findings and have instructed our lawyers to appeal,” the airline said.

“All Ryanair’s airport arrangements comply fully with state aid rules and rulings at other airports are under appeal to the extent that they wrongly allege otherwise.”

Tuifly said that it had not received the judgment but would decide on further action when it arrived.

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