Business

Thursday 2 October 2014

Ryanair ordered to repay €10m in illegal state aid

Published 24/07/2014 | 02:30

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Ryanair has to pay back nearly €10 million in State aid
Ryanair has to pay back nearly €10 million in State aid

Ryanair has been ordered to pay back nearly €10m in illegal state aid it received for operating at three airports in France.

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The European Commission has ruled that the state aid, which included marketing support and rebates, breached rules and gave Ryanair an unfair advantage over rivals.

Ryanair no longer operates at two of the airports.

The watchdog said that at Nimes Airport in the south of France, Ryanair had secured advantageous service and marketing agreements between 2000 and 2010. The airline currently has four routes from Nimes.

The commission said those arrangements provided Ryanair with "undue economic advantage" over rivals.

"These agreements could not have been reasonably expected to improve the financial situation of the airport when they were entered into," said the commission. "No private operator would have accepted to grant similar conditions."

It concluded that the arrangements constituted state aid and wasn't compatible with the internal market.

It ordered Ryanair to pay back €6.4m it received, in order to "reduce the distortion of competition created by incompatible aid".

Ryanair has dismissed what it described as the "erroneous" decision made by the commission and said it intends to appeal.

Its appeal will also cover a finding made against it in relation to activities at Pau Pyrenees Airport.

The airline has been told to pay back €2.4m in state aid it received there.

It also has to pay back a further €868,000 in relation to support it received at Angouleme Airport.

Ryanair no longer flies to either Pau or Angouleme.

"We will immediately appeal the decisions in Pau, Angouleme and Nimes cases where the EU Commission mistakenly suggested that the airports' agreements with Ryanair did not fully comply with the EU state aid rules," Ryanair director of legal and regulatory affairs Juliusz Komerek said.

The commission found that supports awarded at Germany's Niederrhein-Weeze Airport were compatible with state aid rules.

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