Ryanair warned yesterday that it may have to suspend services on its Strasbourg route for a year after losing a French court battle over the subsidies it receives to fly into the airport.
An appeal court in Nancy ruled that a tribunal verdict outlawing the subsidy arrangement could not be put on hold while the Irish no-frills carrier fights the decision.
Under a deal agreed with Ryanair in June last year, the Strasbourg chamber of commerce agreed to give it €1.4m (£1m) in aid to help launch a twice-daily service to the city from London Stansted.
Brit Air, a rival carrier owned by Air France, objected to the aid and lodged a formal complaint. The administrative tribunal in Strasbourg upheld the complaint and ordered the aid payments to cease from next Wednesday.
There are fears that the Strasbourg ruling could set a precedent, jeopardising more of Ryanair's flights into France where its route network has expanded following the takeover of its low-cost rival Buzz.
Ryanair is fighting a similar battle over the terms of its agreement to fly in and out of Charleroi airport, near Brussels. The European Commission is currently investigating the arrangement.
Speaking from outside the Nancy appeal court, Ryanair's head of regulatory affairs, Jim Callaghan, said: "We are dismayed with the court's decision. We will now have to suspend the route pending the outcome of the appeal which could take a year to be heard. In the meantime, French consumers and UK visitors to the Alsace region will suffer." Mr Callaghan said the suspension of the flights would lead to the loss of 200,000 passengers for Strasbourg airport, along with the tourist spending they brought to the region. He added that in August alone Ryanair carried half the number of passengers on the London-Strasbourg route that Air France handled in a year.
Ryanair shares fell 2 per cent to close 12.5p lower at 447.5p.