Brennan concerned at implications of Ryanair ruling

The Minister for Transport has expressed his concerns to the European Commission over a decision that could cost Ryanair millions of euros in repayments for illegal state aid.

Mr Brennan held an informal meeting with the EU Transport Commissioner, Ms Loyola de Palacio, in Brussels this morning.

Yesterday, Ms de Palacio said Ryanair should repay subsidies it received from Belgian authorities at Charleroi airport, south of Brussels. She said reduced landing charges and ground handling fees at the airport were in breach of EU rules on state aid.

It is estimated the total cost to the airline - which was granted a 50 per cent cut in landing charges and a 90 per cent reduction in passenger charges by the Walloon government - could reach €13 million.

Ryanair chief executive Mr Michael O'Leary said the Spanish commissioner's announcement was incredible and he would fight any ruling against his airline in the European Court of Justice. Ryanair announced poor third-quarter results today and its shares fell by 20 per cent.

Ms Palacio also recommended a number of strict conditions for state support for new routes, including that such support can be given for a maximum of three years.

A Department of Transport spokeswoman said Mr Brennan told the commissioner he was concerned that there could be serious consequences for Aer Lingus and Irish regional airports.

Aer Lingus is hoping to expand into the Eastern European market after the ten new accession states join the EU on May 1st. Mr Brennan is concerned the recommendations could hamper this expansion. There are also concerns Government support for Aer Rianta may be in breach of the ruling.

He said the topic may be put on the agenda of the EU Summit in Dublin in March.

Other than the three-year rule, the Commissioner recommended that state support can only be given to airlines if the routes are clearly new, the cost of the support is verifiable and  the support can only account for 50 per cent of the total cost of the service. The Commission will discuss her proposals next week.

Mr Brennan was in Brussels to announce details of a new directive on the safety of non-EU aircraft using airports in member-states. The measures, which will also include the issue of a "name and shame" list of suspect non-EU aircraft, were given added urgency in the wake of an airline crash this month in Red Sea off the coast from the Egyptian resort of Sharm El-Sheikh.

"This directive will harmonise and improve existing procedures on checking and sharing of information procedures for foreign aircraft," said Mr Brennan. "All European aircraft are already subject to stringent EU wide safety standards, which are rigorously applied."

The European Commission will publish an annual report with the names of aircraft banned from EU airspace and where there is an increased safety risk for air travellers.