Independent review

	THE GUARDIAN

EU cool on Ryanair chief's plea for future of airline

Andrew Osborn in Brussels
Friday September 5, 2003
The Guardian

Ryanair chief executive Michael O'Leary yesterday made an impassioned plea to the European commission not to rule his controversial, subsidy-high business model illegal in a bold attempt to secure the budget airline's future.

His eleventh-hour intervention came as the commission said it was in the final phase of an investigation into potentially illegal subsidies the firm receives from Belgium's government-owned Charleroi airport - one of Ryanair's key European hubs.

The case's outcome is seen as crucial for the future of Ryanair and other low-cost carriers and will determine how much state aid small, publicly owned airports can grant to no-frills carriers.

Mr O'Leary met with Loyola de Palacio, the European transport commissioner, and sought to persuade her that the firm's contract with the airport did not discriminate against other carriers since it was available to everybody.

He also said he was confident the EU would not rule against him; but European officials seemed unimpressed. "We have listened to Mr O'Leary," said one. "But we have other considerations.

"We will decide by November at the latest, but we still have not taken a decision. We are in favour of low-cost airlines but we must be sure that nobody is breaking the rules. "We have to decide whether the tax breaks and other public money which Ryanair receives are acceptable or whether it constitutes illegal state aid."

Another official who asked not to be named said that the commission also had concerns about the manner in which Charleroi airport had granted Ryanair the subsidies.

"It's one thing to make an investment, but it's another to do it secretly. When the negotiations took place they were not public and a lot of people did not know what was available, and now all the slots are taken. It's too late."

If the commission finds against Ryanair it could be forced to pay back any state aid. However, Mr O'Leary claimed he was not worried. "I want an early decision and a positive decision and I'm confident that we'll get both," he said.

In the event that there was not a positive outcome and Ryanair had to amend its contract with Charleroi, he said, at least four other airports were willing to step in - although he declined to name them.