More time given in Ryanair state aid issue

The European Commission has given the Walloon regional government another 15 days to quantify the amount of money granted as illegal state aid that it will take back from Ryanair.

A Commission spokesman said yesterday it was still unsure how the Walloon government, which owns Charleroi airport in Belgium, was going to calculate the amount to be repaid.

"We received some information at the end of May but that information does not tell us exactly how they're going to do the calculations and how they are going to recover the amounts involved," the spokesman said.

He was responding to a report in Belgian newspaper Vers L'Avenir, where Walloon's Economics Minister, Mr Serge Kubla's cabinet saying it had asked the Commission for details on which aid has to be recovered.

Last February, the Commission ordered Ryanair to repay subsidies, estimated at up to €4.5 million, received when it agreed a 15-year deal at Charleroi airport in 2001. These subsidies are illegal under EU law. Ryanair has appealed the ruling claiming it was a "flawed decision".

The airline claims the Commission's decision completely ignored the fact that the agreement between Ryanair and the airport arose after intense negotiations with several other airports.

Ryanair has refused to pay back the alleged state subsidies to the airport. Chief executive Mr O'Leary said last month that the Belgian authorities had written to Ryanair demanding the repayment of about €3 million. He told the Financial Times: "We have written back to say 'fuck off'."

He explained that Ryanair had incurred costs in setting up its base at Charleroi and that the airline had the right to offset these costs against the alleged subsidies.

Under the state aid rules, a public airport must be able to compete on a level playing-field with private airports and offer the same conditions, said the airline. Charleroi airport, which became Ryanair's first base in continental Europe in April 2001, is owned by the regional government of Wallonia.

The Commission investigated Ryanair's deal at Charleroi on foot of a compliant from Brit Air, a subsidiary of Air France.

It established that the airline paid just 50 per cent of its published landing fees and was indemnified against any losses it might suffer if airport taxes were to rise during the 15-year contract.