Ryanair to offer Charleroi proof

Ryanair claims it will definitively prove before the end of this week that it did not benefit unfairly from government subsidies in setting up its hub at Charleroi near Brussels, according to the airline's chief executive, Mr Michael O'Leary.

The discount airline's relationship with the operator of Charleroi has been under scrutiny from the European Commission for more than a year.

Transport Commissioner Ms Loyola de Palacio initiated a formal inquiry into the matter in December, expressing concern that Ryanair could have benefited improperly from state aid when setting up its hub.

Mr O'Leary said the airline would provide the Commission with documentary evidence to the contrary over coming days.

He has dismissed Ms de Palacio's inquiry as an act of "stupidity" from the start. He met the Commissioner on the issue yesterday and later told reporters that he could provide evidence that the terms of Ryanair's link with Charleroi had been rejected by other airlines.

The Commission's investigation is believed to have centred on a possibility that other airlines operating services from Charleroi were not offered the same conditions. Mr O'Leary also said Ryanair had chosen Charleroi as its hub in 2000 above cheaper privately-owned alternatives.

"We had four other proposals from European base airports, some of which were slightly cheaper," he said. "It clearly shows that the airport and the Wallonian government were acting on the investor principle."

The Commission's inquiry into the hub forms part of a general drive against subsidising EU airlines. Ms de Palacio opposes such a system, believing it distorts free-market competition and maintains the fragmentation of the sector.

It is understood Ryanair benefits from a 50 per cent discount on landing fees at Charleroi, and profits from valuable reductions on handling charges.

The airport is majority-owned by Sambrinvest, a company that promotes regional development in Wallonia.

Ryanair has carried almost three million passengers to and from Charleroi since 1997.

Mr O'Leary said yesterday that the airline would offer 50,000 free seats to Charleroi in recognition of reaching this "landmark figure".

He also said Ryanair was talking to another airport in Belgium about opening routes from there.

This airport at Ostend is operated by BIAC. The firm operates Belgium's main airport in Brussels, and is believed to have been behind a complaint to the Commission about Ryanair's deal at Charleroi. (Additional reporting Reuters)