AEA Welcomes European Commission’s Ruling that Payments to Ryanair by Charleroi Airport are State Aids.

The Association of European Airlines (AEA) has reacted to the European Commission’s ruling on subsidies paid by Charleroi Airport to Ryanair by describing the judgement as a first but important step towards a level playing-field for European airlines.

“As this case has developed”, said Ulrich Schulte-Strathaus, Secretary General of the AEA, “it has become clear that the arrangements between the airline and the airport – through its majority shareholder, the Walloon regional government – are distorting competition to the disadvantage of Brussels National Airport and the airlines flying there”.

It was incongruous, he elaborated, that a region could give this kind of discriminatory financial support. “Are we expected to believe that there is a natural market at Charleroi that can support three Boeing 737 services a day to London, and two a day to Venice? The Charleroi routes only make economic sense if – firstly – they are represented as serving Brussels and – secondly – they are supported by subsidies. While those subsidies might stimulate a portion of the market which would not otherwise have flown at all, they also clearly divert traffic away from the established airlines at established airports. The fact that taxpayers’ money is being used to redirect business from one group of private companies – the airlines at Brussels National Airport – to another private company, namely Ryanair, is simply unacceptable”.

“The Commission’s decision establishes that the Charleroi airport did not act as any private investor would have done; the payments granted to Ryanair are therefore illegal according to the European State Aid rules. What has to happen now is that the illegal subsidies must be repaid, the rest must be integrated into a transparent, non-discriminatory and controlled process.”

“As a further step, the Commission should outline how other arrangements of this kind, elsewhere in Europe, can be brought in line with a coherent framework. When everyone knows the rules, and plays by them, competition can flourish to everyone’s benefit”.

The AEA, which had supported the liberalised Single Market for air transport in Europe, was proud of its pro-competition credentials, he continued. “We have no argument with the no-frills carriers in general; they have successfully identified a market niche which complements the network carriers, and have influenced customer expectations over a broad range of travel needs. We are reacting to the messages that the market is sending out, and emulating the new entrants in areas of cost control. Air travellers have benefited from the mutual influence of both market approaches. However, the legitimacy of the no-frills business model adopted by the majority of players in this sector contrasts with the illegal aids received by Ryanair at Charleroi”.

03 Feb 2004