Brus­sels or­ders France to re­claim Ryanair sub­si­dies

Financial Mirror (Cyprus) - - FRONT PAGE -

The Euro­pean Com­mis­sion’s on­go­ing bat­tle with Ryanair over illegal state aid has en­tered a new stage. The EU’s com­pe­ti­tion au­thor­ity an­nounced on July 27 that it would take France to court for its fail­ure to re­cover illegal state aid given to Ryanair and Transavia, ac­cord­ing to news­blog EurAc­tiv France.

Brus­sels had or­dered France on July 23, 2014 to re­claim nearly EUR 10 mln it had paid to the two low-cost air­lines to help them set up oper­a­tions at the air­ports of Pau, Nimes and An­gouleme.

Ryanair was or­dered to re­pay EUR 6.4 mln of aid it re­ceived for its base at Nimes air­port, EUR 2.4 mln for Pau-Pyrénées air­port and EUR 870,000 for An­goulême, where the com­pany has since ceased its oper­a­tions. Transavia, a branch of Air France, was also or­dered to re­pay EUR 430,000 in illegal state aid.

“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 Com­mis­sion said.

One year af­ter the Com­mis­sion’s de­ci­sion, the air­lines are yet to re­turn the illegal aid. The process suf­fered de­lays when the car­ri­ers took the French gov­ern­ment to court af­ter the author­i­ties is­sued the ini­tial re­cov­ery or­der.

“Ryanair has also ap­pealed two out of three of the Com­mis­sion’s de­ci­sions (con­cern­ing Pau and An­gouleme) be­fore the EU Gen­eral Court,” the Com­mis­sion said. Un­like an ap­peal in French law, these ap­peals have no “sus­pen­sory ef­fect un­der EU law, mean­ing that France con­tin­ues to be un­der an obli­ga­tion to re­cover the in­com­pat­i­ble aid,” the Euro­pean ex­ec­u­tive added.

For sev­eral years, Ryanair has faced re­peated ac­cu­sa­tions of ben­e­fit­ing from illegal state aid in France and other EU coun­tries, to en­sure the com­pany con­tin­ues to serve re­gional air­ports.

De­spite adopt­ing more flex­i­ble guide­lines on state aid for air­ports and air­lines in Fe­bru­ary 2014, Brus­sels is still pur­su­ing sev­eral com­pa­nies and air­ports over illegal sub­si­dies.

Aside from the cases of An­gouleme, Pau and Nîmes, the EU ex­ec­u­tive found that Ryanair had also re­ceived an “un­due eco­nomic ad­van­tage, es­ti­mated at around EUR 318,569” in its agree­ment with the air­port of Al­tenburg-No­b­itz in Ger­many, which it has or­dered the car­rier to re­pay.

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