Ryanair ready to take on EC over state aid

Ryanair is preparing legal action against the European Commission over its decision to outlaw the discounts it receives for flying to Brussels' Charleroi airport.

On Tuesday, the Commission will rule that Ryanair receives an unlawful form of state aid from the Belgium government, in a decision that will have wide ramifications. Many small, state-owned airports offer incen- tives to airlines in an attempt to boost tourism. The Charl- eroi decision is expected to put an end to the practice.

Michael O'Leary, chief executive of Ryanair, said: "We will challenge them in the European courts. The ruling will force us to put up fares and may make us tear up routes. A lot of regional airports will not be able to grow as a result."

The low-cost airline will go through the European Court of First Instance, said Jim Callag- han, Ryanair's head of regulatory affairs. "We are not receiving state aid. The Commiss- ion is using the case to set a precedent in the industry, but there is no problem with it legally or factually." He said the Irish and UK governments were also "very concerned about this" and may apply pressure to reverse the ruling.

A Department for Transport spokesman said: "We support the application of state aid rules, but ... we think the Commission should take account of the low-cost airlines."

But Ryanair's rival, easyJet, believes the Commission is right. A spokesman said: "Is this state aid? Yes it is. Instead of taking his medicine, Michael O'Leary has been going around saying that come Christmas Santa Claus won't have anywhere to land his sledge."

Separately, easyJet and BA are threatening to take legal action to block new European rules that would force airlines to pay compensation for delayed flights.