Ryanair may have to repay German aid

Ryanair is facing a possible attempt by the German authorities to force it to repay millions in state aid following a European court ruling yesterday.

The airline yesterday announced details of 12 new services to and from Stansted airport in England that it said would boost passenger numbers from next year by 1.3 million annually.

Shortly before the announcement, the European Court of Justice (ECJ) issued a ruling that paves the way for Ryanair's rival, Lufthansa, to demand that German courts order the Irish carrier repay state aid by Frankfurt Hahn Airport.

The case stems from an investigation the European Commission launched in 2008 into the fact Ryanair benefited from a substantial reduction of fees at the airport, which also provided some marketing support for the routes it operated.

Two German states, Rhineland Palatinate and Hessen, and the Federal Republic itself, have shares in the firm that owns the airport and the commission suspected the cut in charges and marketing support constituted illegal state aid.

Charleroi precedent
That inquiry is still ongoing, along with 19 similar ones. Ryanair has argued several times in the past that the commission already cleared a similar deal with Charleroi airport in Belgium, which means that its arrangement with Frankfurt Hahn is not state aid.

However, yesterday’s ruling was on a related case taken by its local competitor, Lufthansa, which argued that, under European law, once the commission’s investigation began, the aid should be frozen and any benefit received up to that point should be recouped from Ryanair.

The ECJ ruled in Lufthansa’s favour and it is expected that the German airline will go back to the German courts and ask them to order that Ryanair repay the aid.

If the investigation finds that the Irish airline did not receive state aid, the cash will be repaid. There was no figure available for the amount involved.

In response, Ryanair said it “welcomes the clarity today’s European Court judgment brings and will study the ruling in detail”.

“The European Courts in December 2008 already dismissed European Commission state aid claims against Ryanair when it found, in the Charleroi case, that Ryanair’s airport agreements complied with EU competition rules. Ryanair’s arrangements with all EU airports comply with competition rules,” it added.