The European Commission is expected to take a tough line in a landmark state-aid case against Ryanair, by ruling that several of the benefits granted to the low-cost airline are illegal.
The final decision in the case is expected this month but people familiar with the preliminary ruling say the carrier will also be ordered to repay some of the benefits it received in return for setting up a base in the Belgian town of Charleroi.
While details of the ruling remain unclear and the decision could still be modified, the findings could deal a blow to one of the biggest success stories in European aviation.
It could not only raise the carrier's famously low-cost base but also make it more difficult to negotiate favourable deals with the small, regional airports it uses across Europe.
The ruling could also set off a series of similar probes by the Commission.
Brussels has already received formal complaints with regard to Ryanair's operations in the French airports of Pau and Strasbourg.
Ryanair has insisted in the past that it would be able to weather any adverse ruling.
The airline's chief executive, Mr Michael O'Leary, said this week that Ryanair would challenge any Commission attempt to reclaim money or to increase its charges at Charleroi.
A final decision on the case must be taken at a meeting of all European Commissioners, expected this month.
The Commission said in January that Ryanair and the Walloon region (the area surrounding Charleroi) signed an agreement under which the carrier pays landing fees 50 per cent below the official rate.
Mr O'Leary said this week that the Walloon government was considering privatising the airport if the Commission should rule that the deal represented illegal state aid.
The airline said yesterday that it would mount a legal challenge to a new law setting levels of compensation for delayed passengers.
The airline is lobbying EU governments to reject the Bill that will set a flat rate of €250 for passengers denied boarding onto short-haul flights.
The legislation is at its last stage before becoming law. "It is not in the consumer's interest. It is going to lead to increased costs," said Mr Jim Callaghan, Ryanair's head of regulatory affairs.
Mr Callaghan said he expected other airlines to support Ryanair in challenging the rules if they become law. "But, if the worst comes to the worst, we will challenge it on our own."
The Bill was finalised last month by members of the European Parliament and the Council of Ministers, representing national governments. It now only has to be ratified by both bodies, usually a formality.
Ryanair says the Bill has changed drastically since transport ministers last saw it and sets intolerable requirements on airlines, even those advertised as "no-frills", to provide drinks, meals and hotel rooms to stranded passengers. - (Financial Times and Reuters)
