Ryanair 2012 Annual Report Download - page 104

104
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 €4 million that the Commission had claimed was
illegal state aid. The Belgian government has also withdrawn a separate €2.3 million action against Ryanair
arising from the European Commission‘s decision.
In July 2012, the European Commission concluded that the financial arrangements between the
Tampere airport in Finland and Ryanair do not constitute state aid within the meaning of EU rules, because such
arrangements are in line with market terms.
Ryanair is facing similar legal challenges with respect to agreements with certain other airports,
notably Lübeck, Berlin (Schönefeld), Alghero, Pau, Aarhus, Frankfurt (Hahn), Dusseldorf (Weeze),
Zweibrücken, Altenburg, Klagenfurt, (Stockholm) Vasteras, Paris (Beauvais), La Rochelle, Carcassonne,
Nimes, Angouleme, Marseille and Brussels (Charleroi). In January 2010, the European commission concluded
the Bratislava state aid investigation with a finding that Ryanair‘s agreement with Bratislava airport involved no
aid. The remaining nineteen investigations involving Ryanair are ongoing and Ryanair currently expects that
they will conclude within the next 12 months, with any European Commission‘s decisions appealable to the EU
General Court.
State aid complaints by Lufthansa about Ryanair‘s cost base at Frankfurt (Hahn) have been rejected by
German courts, as have similar complaints by Air Berlin in relation to Ryanair‘s arrangement with Lubeck
airport, but following a German Supreme Court ruling on a procedural issue in early 2011, these cases will be
re-heard by lower courts. In addition, Ryanair has been involved in legal challenges including allegations of
state aid at Alghero and Marseille airports. The Alghero case (initiated by Air One) was dismissed in its entirety
in April 2011. The Marseille case was withdrawn by the plaintiffs (subsidiaries of Air France) in May 2011.
In September 2005, the European Commission announced new guidelines on the financing of airports
and the provision of start-up aid to airlines departing from regional airports, based on the European
Commission‘s finding in the Brussels (Charleroi) case, which Ryanair successfully appealed. The guidelines
apply only to publicly owned regional airports, and place restrictions on the incentives these airports can offer
airlines to deliver traffic. The guidelines apply only in cases in which the terms offered by a public airport are in
excess of what a similar private airport would have offered. Ryanair deals with airports, both public and private,