Ryanair shares fall on EU 'unfair aid' inquiry

Shares in Ryanair fell today after the European Commission said it would formally investigate whether the airline received unfair…

Shares in Ryanair fell today after the European Commission said it would formally investigate whether the airline received unfair benefits to site a continental European hub in Belgium.

Ryanair shares were down 3.9 per cent to €6.98 in Dublin, and off 4.6 per cent in London at 440 pence.

Mr Shane Matthews at NCB Stockbrokers said the EU probe could also have implications for other low-cost carriers.

"This investigation is set to be a test case for all similar airport deals and as such could have serious ramifications for all of Ryanair's deals with state-owned airports," he said in a research note.

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"Other low-cost operators who have chosen to use secondary state-owned airports may also be affected by an adverse ruling."

But Mr Matthews kept a "buy" rating on the stock and said Ryanair would stick to its business plans regardless of the probe.

"(Ryanair CEO Michael O'Leary) is not going to change the business model and is going to use the secondary airports," he told reporters.

"It's really just a question of giving back money you received if you lose the case, and which other airports are in a similar position," he said.