Ryanair said today it would suspend its London-Strasbourg service in a row over regional subsidies it receives to fly to secondary European airports.
It is the first time the carrier has suspended a service in the face of challenges by competitors, who claim it won unfair contracts to fly to smaller airports.
The European Commission has begun a wider investigation into such deals, focusing mainly on Ryanair's contract to use Charleroi Airport in Belgium. A ruling is expected in the autumn.
Ryanair said it had no choice but to halt the Strasbourg service, giving four weeks' notice, after it failed to win a stay of a lower court ruling that the aid Ryanair obtained was illegal.
Ryanair said that from September 24th, it would shift flights to Baden Baden Airport in Germany, 40 kilometres from Strasbourg.
"If and when we receive a stay on the judgment (or win the appeal), then Ryanair will make arrangements to recommence flights on the London-Strasbourg route," the airline said in a statement.
The airline denounced French flag carrier Air France for mounting the legal challenge to the deal Ryanair struck with a local chamber of commerce to start up the route last year. "It is wrong that anti-competitive court actions of Air France should result in the Strasbourg and the Alsace region losing - even on a temporary basis - its only scheduled air service to London," Ryanair said.
The Bas-Rhin Chamber of Commerce and Industry, which manages the airport in eastern France, promised in June 2002 to give Ryanair €1.4 million to set up two daily round-trip flights between London's Stansted and the capital of the Alsace region.
Brit Air, an Air France subsidiary, was forced to cancel its London-Strasbourg link in face of competition and launched an appeal, saying the aid distorted competition.
Ryanair shares were down 0.15 per cent at €6.59 on the ISEQ index of shares just before noon today.