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Last Updated: Tuesday, 13 April, 2004, 11:18 GMT 12:18 UK
Ryanair revives Charleroi service
The deal is good for Charleroi, Ryanair insists
Budget airline Ryanair has announced a deal that will allow it to keep flying from Belgium's Charleroi airport.

The airline had threatened to cut off its 11 routes from Charleroi, after the European Commission ruled it had benefited from illegal subsidies.

The authorities in Charleroi, a region of high unemployment south of Brussels, were concerned about the economic impact of Ryanair's departure.

Now, the subsidies are to be reworked, with no net loss to the airline.

The agreement between Ryanair and the Walloon regional government will form the centrepiece of Ryanair's appeal to the European Court of First Instance.

Perks and preferences

Brussels' original judgement - handed down in February - argued that Ryanair was effectively being subsidised to use Charleroi.

The charge arose from the highly favourable package of landing fees and other perks the airline enjoyed.

This latest deal envisages the existing arrangements at Charleroi continuing until the airport reaches two million passengers a year.

Crucially, however, the Walloon authorities will offer the same conditions to other airlines.

Ryanair has now committed itself more firmly to using Charleroi as a base.

The new agreement foresees the airline basing more aircraft there, and launching new routes, subject to a new terminal being constructed.

New rules

The question now is whether the revised arrangements can win the approval of the Commission.

Ryanair check-in
Has Ryanair done enough to win its case?
This may seem unlikely, given the lack of fundamental changes from the previous state of affairs.

But by opening the deal up to other airlines, Charleroi may have done enough to persuade Brussels that it is not unfairly favouring Ryanair.

Ryanair also argues that the deal represents a sound commercial decision for Charleroi, which stands to benefit from increased investment.

The Commission in February argued that the arrangement was not one that a correctly-motivated private-sector airport would ever sign, and so distorted market principles.

The European Court case is to be heard next month.

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26 Feb 04  |  Business
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Ryanair fears defeat on subsidies
27 Jan 04  |  Business

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