Ryanair’s Danish ‘state aid’ comes under the spotlight

By Peter Chapman

Date: 10/11/04

The European Commission is investigating claims that state aid payments made by a publicly-owned Danish airport have helped the Irish low-cost airline Ryanair.

The move is the latest air-traffic deal to come under scrutiny in Brussels following the EU executive's ruling on state subsidies to induce the company to operate its European hub from Charleroi airport, 40km south of Brussels.

It follows reports that Esbjerg airport, owned by regional authorities, has promised huge subsidies to Ryanair in return for offering flights to the coastal town.

Danish liberal MEP Karin Riis Jørgensen said Ryanair paid taxes of DKR 38 (l5.10) per passenger - even though the "standard rate", set by the National Air Transport Authority is DKR 154 (l20.70).

Loyola de Palacio, outgoing Commissioner for transport, said the EU executive "intends to take this matter up with the Danish authorities to determine if there are any possible state aid implications in this arrangement".

"This consultation of the Danish authorities will be carried out in the context of the ongoing examination of these types of arrangements following the Commission decision concerning the Walloon Region, Brussels South Charleroi Airport and Ryanair," she said.

Her spokesman, Amador Sánchez Rico, added that the investigations were still in an "informal" phase.

A Ryanair spokeswoman said the company was not immediately able to comment on the issue.

The move comes as Ryanair, the biggest European low-fare airline said it had taken steps to repay €4 million in state aid allegedly received from the Walloon region of Belgium to induce the company to operate from Charleroi airport.

The Commission has already announced that it is looking at similar air service agreements involving budget airlines, including Ryanair, operating flights in Germany, France and Spain.

In the Charleroi case, Michael O'Leary, the company's chief executive said that the company had reluctantly lodged the funds in a blocked interest-bearing bank account pending the results of a legal challenge.

The Belgian repayment was made following a ruling by the Commission against Ryanair's deal with local authority-owned Charleroi airport.

De Palacio said the discounts on landing and ground-service fees were illegal because they gave Ryanair an unfair advantage in the market.

The case stemmed from a complaint from Brussels's main Zaventem airport, which suffered a severe loss of traffic.

In the Esbjerg case, Ryanair offers weekend return fares to and from London's Stansted for around DKR102, (€13.70).

Article reports that the European Commission is investigating claims that state aid payments made by a publicly-owned Danish airport helped the Irish low-cost airline Ryanair.