French rivals take Ryanair to Euro court

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Ryanair, the low-cost airline run by Michael O'Leary, is to be taken to the European Court over alleged "illegal aid" it receives from local authorities in France.

Ryanair, the low-cost airline run by Michael O'Leary, is to be taken to the European Court over alleged "illegal aid" it receives from local authorities in France.

French charter company Air Méditerranée and Air France affiliate Brit Air, have already filed complaints to the European Commission for what they claim are hidden state subsidies allocated to Ryanair on a preferential basis and are now going to the European Court for a ruling.

Air Méditerranée, which charters flights from London to Tarbes, near Lourdes, claims Ryanair will receive up to €700,000 (£490,000) for flying to neighbouring Pau airport. It is filing a complaint for unfair competition and illegal state subsidies with the European Court, and expects the case to be heard in June.

Ryanair has become notorious in Europe for what it secures from local authorities for operating in regional airports. The funding, which usually includes substantial reductions in handling and airport charges, is provided by the local chambers of commerce and tourist boards.

Ryanair is already receiving €1.5m a year for its London-Strasbourg route, which it has operated since October, and is set to receive €700,000 for its newly launched route to Clermont-Ferrand. But the airline has come under attack from French regional competitors.

"Ryanair's arrival in Pau was not open to competitors, which is clearly against European law," said Air Méditerranée's chief executive, Antoine Ferretti. "If Ryanair continues to operate with the same benefits we will not be able to stay afloat."

Air Méditerranée is the second French airline to file a complaint to the European authorities about Ryanair. Air France's regional subsidiary, Brit Air, recently failed in the French courts to suspend Ryanair's activities in Strasbourg, but is now pursuing its complaint with the European Commission.

But Air Méditerranée, backed by Brit Air, claims the terms of the offer made to Ryanair in effect exclude competitors, as it was open only to "a low-cost airline, linking southern and northern Europe, with passenger numbers exceeding 60,000 a year".

Brit Air's chief executive, Alain Huberdeau, said the airline was confident the European Courts would rule in its favour. Brit Air is in the process of suspending all flights on its London-Strasbourg route this month after reporting 50 per cent profit losses since Ryanair's arrival.

"There is no doubt in our mind that these sums qualify as illegal state subsidies," M. Huberdeau said.

Ryanair is already being investigated by the European Commission on account of its operations at Charleroi airport, outside Brussels, where it is alleged to have benefited from illegal state aid through reductions in handling and airport charges.

The company has consistently denied the allegation. "We expect a fast and positive response from the European Commission over the Charle-roi allegations, and from any action undertaken by French competitors," said a spokes-man for Ryanair.