THE EUROPEAN Commission has decided not to appeal a landmark court judgment that found it was wrong to block Ryanair receiving state aid for flying into Charleroi airport in Belgium.
The decision may enable the airline to negotiate new discounts from state-owned airports and regional authorities, which the EU executive had previously ruled “illegal”. Ryanair will also be able to keep the €4 million in state aid payments that had been put on hold while Europe’s second-highest court heard its long running case against the commission.
“The commission decided that it will not appeal the decision of the Court of First Instance (CFI). We will now study the matter further and the commission will issue a new decision implementing the court’s decision,” said a spokesman for EU transport commissioner Antonio Tajani yesterday when asked about its response to the CFI ruling.
Under its first contract with Charleroi airport, which is owned by the Walloon regional authority, Ryanair negotiated discounts in landing charges and ground-handling services in return for agreeing to base between two and four aircraft there. The agreement set the standard for its low cost airport model, which it subsequently rolled out across Europe as it rapidly expanded the number of European bases it operated from.
But following a compliant by a rival airline the commission ruled in 2004 the state aid negotiated by Ryanair was illegal and incompatible with internal market rules. It said its decision was “a major decision of significance for the future of air transport” and drafted a new set of state aid guidelines for airports, at least in part based on the decision. It subsequently launched state aid investigations involving Ryanair airport deals at Alghero, Aarhus, Bratislava, Frankfurt-Hahn, Hamburg-Lübeck, Pau, Berlin and Tampere.
Ryanair appealed the commission’s 2004 decision to the CFI, which ruled in December 2008 that the EU executive was wrong to block the aid. The CFI effectively found that public authorities that own airports should not be treated differently by the commission when negotiating landing charges compared to the operators of private airports. It said the commission had made an error in law and annulled its decision in the Charleroi case.
The 60-day legal deadline for appealing the CFI decision passed earlier this week.
Jim Callaghan, Ryanair’s director of legal and regulatory affairs, welcomed the decision by the commission not to appeal and called on it to drop the ongoing state aid cases involving Ryanair airports. He said the 2005 state aid guidelines for airports that the commission drew up in the wake of its decision on the Charleroi case in 2004 should now be withdrawn.
“It is worrying that the commission are still pursuing a number of cases based on the Charleroi case while not tackling member support for national airlines,” he said.
However, a commission spokesman said its decision not to appeal the Charleroi case did not influence the other cases.
