Brussels orders France to reclaim Ryanair subsidies
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.