Ryanair 2010 Annual Report Download - page 110

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Item 8. Financial Information
CONSOLIDATED FINANCIAL STATEMENTS
Please refer to “Item 18. Financial Statements.”
OTHER FINANCIAL INFORMATION
Legal Proceedings
The Company is engaged in litigation arising in the ordinary course of its business. Although no
assurance can be given as to the outcome of any current or pending litigation, management does not believe that
any of such litigation will, individually or in the aggregate, have a material adverse effect on the results of
operations or financial condition of the Company, except as otherwise described below.
EU State Aid-Related Proceedings. On December 11, 2002, the European Commission announced the
launch of an investigation into the 2001 agreement among Ryanair, the Brussels (Charleroi) airport and the
government of the Walloon Region of Belgium, the owner of the airport, which enabled the Company to launch
new routes and base up to four aircraft at Brussels (Charleroi). The European Commission’s investigation was
based on an anonymous complaint alleging that Ryanair’s arrangements with Brussels (Charleroi) constituted
illegal state aid.
The European Commission issued its decision on February 12, 2004. As regards the majority of the
arrangements between Ryanair, the airport and the region, the European Commission found that although they
constituted state aid, they were nevertheless compatible with the EC Treaty provisions and therefore did not
require repayment. However, the European Commission also found that certain other arrangements did
constitute illegal state aid and therefore ordered Ryanair to repay the amount of the benefit received in
connection with those arrangements. On April 20, 2004, the Walloon Region wrote to Ryanair requesting
repayment of such state aid, although it acknowledged that Ryanair could offset against the amount of such state
aid certain costs incurred in relation to the establishment of the base, in accordance with the European
Commission’s decision. Ryanair made the requested repayment.
On May 25, 2004, Ryanair appealed the decision of the European Commission to the CFI, requesting
the court to annul the decision because:
• the European Commission infringed Article 253 of the EC Treaty by failing to provide adequate
reasons for its decision; and
• the European Commission misapplied Article 87 of the EC Treaty by failing to properly apply the
Market Economy Investor Principle (MEIP), which generally holds that an investment made by a
public entity that would have been made on the same basis by a private entity does not constitute
state aid.
In March 2008, Ryanair had its hearing before the CFI, and in December 2008, the CFI annulled the
European Commission’s decision, and Ryanair was repaid the 14 million that the Commission had claimed was
illegal state aid. The Belgian government has also withdrawn a separate 12.3 million action against Ryanair
arising from the same transaction.