EU says Ryanair owes France €9.6 million

Low-cost airline Ryanair received nearly €10 million in illegal government aid and now must pay the money back, the European Commission said on Wednesday. It's another costly blow for Ryanair after a French court ordered it to stump up €9million in damages last year.

EU says Ryanair owes France €9.6 million
Ryanair has been ordered to refund millions in subsidies to local French authorities. Photo: Paolo Margari/Flickr

The European Commission said on Wednesday that low-fare airline Ryanair must repay about €9.6 million in illegal state aid it received for its operations in several French regional airports.

The Commission, the European Union's executive arm, said Ryanair would have to repay €868,000 related to rebates and marketing arrangements negotiated at Angouleme airport in central France.

Ryanair had enjoyed "an undue advantage" and should repay the money so as to "remove the distortion of competition," the Commission said in a statement.

Similar findings at Pau Pyrenees airport required a repayment of €2.4 million with €6.4 million repayable at Nimes airport, both in southern France, it said.

The Commission said it was continuing an investigation into Austria's Klagenfurt airport where airport service and market agreements "appeared to be excessively favourable to Ryanair and therefore could involve incompatible state aid."

Probes into three German regional airports – Dortmund, Leipzig/Halle and Niederrhein-Weeze, where Ryanair is the largest client – found no problems with state-aid payments, it added.

In response, Ryanair said it welcomed the Commission's rulings on the three German airports but would appeal against the other findings.

"All of Ryanair's airport arrangements comply with EU state aid rules and Ryanair has therefore instructed its lawyers to appeal these rulings to the extent they erroneously allege otherwise," it said in a statement.

The company, which pioneered low-cost, no-frills air travel in Europe, said it currently ran four routes out of Nimes but had ceased operations at Pay Pyrenees in 2011 and at Angouleme in 2009.

The case comes less than a year after the low cost carrier fell foul of French authorities in a costly row. The Local reported in October 2013 that a court ordered Ryanair to pay nearly €9 million ($13.5 million) in damages after being found guilty of breaching French labour law.

A court in southern France, which also fined the company €200,000, awarded the damages after ruling that Ryanair had illegally registered staff based at Marseille airport in Ireland in order to save money on payroll and other taxes.

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