Little sympathy for Ryanair in Brussels

A proposal to order Ryanair to repay subsidies received from a Belgian regional government is likely to be approved by the European Commission next week with almost no modifications.

Senior Commission officials showed little sympathy for the airline when they met in Brussels yesterday to discuss the case, despite the misgivings of some commissioners, including Ireland's Mr David Byrne.

There was overwhelming support for the first two elements of Ms Loyola de Palacio's proposal - to order Ryanair to repay savings on landing charges and ground handling fees at Charleroi airport south of Brussels.

Officials said last night that there could be some changes to a list of strict conditions under which the airline could receive other supports, such as marketing and office space.

The lack of sympathy towards Ryanair within the Commission came into the open yesterday when Mr Philippe Busquin, the Belgian Commissioner responsible for research, criticised Mr Michael O'Leary in a newspaper interview. Mr Busquin, who was thought to be critical of Ms De Palacio's proposal, said that Mr O'Leary's comments in recent days had been unhelpful.

"Michael O'Leary is playing poker. He is terribly irritating and irritates the commissioners. We have never spoken of exact figures," he said.

Mr Byrne is understood to be concerned about some legal aspects of the proposal but there appears to be little support for his position and Commission officials suggested last night that there was unlikely to be enough opposition to Ms De Palacio to secure major changes to the proposal before the Commission makes a final decision next week.

Ryanair shares came under pressure again yesterday as investors continued to sell the stock. By close of business Ryanair shares had improved, rising by eight cents to end at €4.83.

Analysts continued to assess the airline's shock profit warning and most issued hold recommendations, believing the stock could continue to struggle for some time yet. The stock was trading at €6.75 before the profits warning.

Mr John Mattimoe of Merrion Stockbrokers said the share price will only recover when Ryanair manages to increase its yields.

Some investors were still smarting because some members of the Ryan family had sold 6.8 million shares, raising €44 million, less than two weeks before the profit warning.

Mr Tony Ryan, the airline's founder, is the only family member on the board of directors and holds 1 per cent of the airline's stock. The shares that were sold are believed to have been placed by some of his three sons, Cathal, Declan and Shane.

It is possible that the stock exchange could look into the share sale in line with its policy of examining share dealings ahead of a major announcement.