Ryanair risks being told to 'Foxtrot oscar' over its legal €11m subsidy

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The Independent Online

Only days before Ryanair faces a deadline to pay back €4m (£2.7m) to the Walloon government in Belgium, Michael O'Leary, the airline's chairman, is in trouble again - this time for a PR stunt last month that might now cost his company an extra €11m.

Mr O'Leary publicly insulted the European Commission in his refusal to repay illegal aid from Belgium's regional government.

Competition regulators in Brussels may now take further action against Ryanair's operation at Charleroi airport by blocking a separate, perfectly legal subsidy which the Walloon government pays to the airline - a considerable €4 for each passenger it brings to the region.

Under EU competition rules, the watchdog is entitled to do this to rebalance what it considers to be an outstanding debt - in this case the previous illegal subsidies. The regulators have noted that these subsidies will distort the market to the detriment of Ryanair's competitors if they are not repaid.

Ryanair received a total of €15m from the authorities to help run its operations, mostly in the form of reductions in landing and ground-handling fees - concessions the Commission said were anti-competitive. Mr O'Leary challenged the ruling last month, branding the Commission "Stalinist" as well as "psychologically and morally bankrupt".

Ryanair had been asked to repay the €4m by 15 September, to which Mr O'Leary replied "foxtrot oscar".

The regional transport minister André Antoine, saying he felt "insulted" on behalf of his constituents, gave Ryanair another month to pay the €4m or face court action. Mr O'Leary refused to acknowledge the demand for payment until in was translated into English.

The airline will try to overturn the repayment through an appeal, filed in May, with the Court of First Instance in Luxembourg, though the case may not be heard until late 2005.