EC Consults On Investment In Airports Following Ryanair Dispute

by Ulrika Lomas, for LawAndTax-News.com, Brussels

10 February 2005

Following the publication of its decision on the state aid offered by the Walloon authorities to low-cost airline, Ryanair, in order to encourage the Irish carrier to fly to Charleroi airport, the European Commission revealed this week that it has lauched a consultation on permitted investments in airports.

On February 3, the EC announced that it would authorise certain forms of aid which permit genuine development of new routes under clearly defined conditions. However, it went on to add that other direct aid granted to Ryanair partly by the Walloon Region, and partly by the Brussels South Charleroi Airport (BSCA) is incompatible with the proper functioning of the internal market and will have to be repaid.

"This legal decision is well balanced: it brings greater transparency into contractual relations between airlines and airports, especially regional airports", Loyola De Palacio, Vice-President of the Commission with responsibility for energy and transport suggested at the time, adding that:

"It will also help the development of 'low-cost' operations, which are very clearly what consumers want, whilst also ensuring equitable conditions of competition for all airlines. All players in the same arena must be able to play by the same ground rules. All airlines must be aware of the possibilities offered and only genuine competition is truly capable of safeguarding consumers' rights."

Following its decision on Charleroi Airport, the Commission announced on Tuesday that it is proposing clear rules on investment in airports both at infrastructure level and with respect to start-up aid. These rules authorise start-up aid for new routes opened at secondary airports, which at times are underused, albeit subject to strict conditions of transparency and with time limits.

The EC also announced its intention to guard against all forms of discrimination to the exclusive benefit of any one company, and to clarify permitted methods for the financing of airport infrastructure.

The new guidelines have been published online, and comment is invited from interested parties until March 7.

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