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Last Updated: Thursday, 18 September, 2003, 13:19 GMT 14:19 UK
Setback for Ryanair in Strasbourg row
Ryanair tail
Ryanair says the payments were a normal start up deal
A French court has ruled that low-cost airline Ryanair cannot keep flying to Strasbourg while it waits to appeal against a ruling that it received unfair subsidies to launch the route.

Ryanair head of regulatory affairs Jim Callaghan said the airline was "dismayed" at the decision as it could have to wait over a year to learn the outcome of its appeal in the subsidies case.

Ryanair announced in August it would halt its flights to Strasbourg from 24 September because of the controversy.

The earlier court ruling found that payments from the local chamber of commerce and the Strasbourg airport operator to Ryanair amounted to an unfair subsidy.

Air France anger

Ryanair argued that the payments were to cover its start-up costs on the route.

The Bas-Rhin Chamber of Commerce and Industry manages the airport in eastern France used by Ryanair.

It had promised the Irish carrier 1.4m euros ($1.5m) to set up two daily roundtrip flights to London Stansted.

But Air France protested that its Brit Air subsidiary had been forced to cancel its London-Strasbourg link because of the competition.

Ryanair said it was carrying 18,000 passengers a month through Strasbourg airport, whereas Air France had only 3,000 a month before the Ryanair route began.

'Not state aid'

Ryanair said its partnership with the local chamber of commerce had led to extra visitors, higher airport revenues and tourist spending, and the creation of about 200 jobs.

"All this will be lost until our appeal has been heard," said Ryanair.

The European Commission is investigating payments made by local authorities in Belgium to Ryanair to open routes to Charleroi airport.

"We're quite confident in the Charleroi case that they'll find in our favour," Ryanair spokesman John Rowley told BBC News Online.

"We've consistently argued that it's not state aid, some of the money is coming from local businesses... getting together to promote their region," he said.

Ryanair has opened a route to Baden-Baden, about 40 kilometres from Strasbourg, to try to keep its traffic in the region.




SEE ALSO:
Ryanair halts Strasbourg flights
26 Aug 03  |  Business
Airlines are 'over the worst'
04 Aug 03  |  Business
Ryanair perfects budget flying
04 Jun 03  |  Business
Ryanair 'to be bigger than BA'
03 Jun 03  |  Business
EU investigates Ryanair
09 Dec 01  |  Business


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