New fees deal with Charleroi airport gives Ryanair shares a lift

Ryanair pledged its commitment to Belgium's Charleroi airport yesterday after agreeing a new deal to keep its landing fees at the airport unchanged.

Ryanair pledged its commitment to Belgium's Charleroi airport yesterday after agreeing a new deal to keep its landing fees at the airport unchanged.

The budget airline had threatened to pull out of the airport after the European Commission ruled earlier this year that the cheap fees it had negotiated with Charleroi's local authority were illegal.

But the revised deal means Ryanair's landing and passenger fees will stay the same, and the Walloon regional government, which operates the airport, will offer the same terms to other airlines.

Shares in the airline rose €0.10 to €5.30 yesterday after it said it would keep flying all its 11 routes served from Charleroi. It had suspended its London to Charleroi route amid concerns that higher landing and ground charges would be introduced.

The existing airport and handling charges will continue for the foreseeable future until there are 2 million passengers a year using the airport. At this point, the airport will open up its aircraft handling services to third parties, which may affect costs. About 1.8 million passengers a year currently travel through Charleroi. Had Ryanair abandoned it completely, traffic in and out of Charleroi would have fallen by more than 90 per cent.

The exclusive arrangement between Ryanair and Charleroi had angered rival airlines, such as SN Brussels and Virgin Express, which use Brussels' main airport Zaventem.

A spokesman for Virgin said the airline was still considering whether to take the Walloon government to court for damages during the period that it was giving subsidies to Ryanair, now judged to have been illegal. Ryanair has also agreed to explore the possibility of flying more aircraft from Charleroi if a new terminal was constructed.

"This agreement removes uncertainty and allows our low-fare services to continue," Michael O'Leary, the chief executive of Ryanair, said yesterday. "We have negotiated a number of other airport base arrangements in recent months at costs which are lower than Charleroi and there was a real likelihood that in the absence of an early agreement, we would have closed the base."

Despite the new agreement, the company is appealing against the commission ruling and said it had an initial court date in early May. Ryanair will argue that airports want to secure lower cost arrangements with it because of the passenger traffic, growth and commercial profits that the airline brings.