Ryanair could receive up to €264,000 in subsidies for its new route from London Stansted to Baden-Baden in southern Germany, which replaces its route to nearby Strasbourg, cancelled because of a controversy into a 1.4 million subsidies deal.
The inaugural flight from Stansted to Baden-Baden on Wednesday is a further step in Ryanair's aggressive expansion into the German market, loudly criticised by German politicians for encouraging abuse of regional subsidies and increasing environmental pollution. Ryanair moved to Baden-Baden, 40 km from Strasbourg, after a French court ruled that the Irish airline could no longer fly to Strasbourg pending an appeal against a ruling that it received unfair subsidies on the Strasbourg route.
The airline hammered out an agreement in Baden-Baden that unless the airport operator, Baden-Airpark GmbH, succeeds in lobbying the state government to drop the cost of security checks from €8.50 to 6 per passenger, the airport will have to pay up to 264,000 into Ryanair's marketing budget next year.
Baden-Airpark also paid Ryanair a one-off marketing contribution of 50,000 for promoting the new Stansted route and has agreed to pay an additional 50,000 for each new route Ryanair brings to the airport.
The airport authorities hope the expense will be offset by a rise in passenger numbers in the coming years.
Ryanair declined to comment on its subsidies deal in Baden-Baden, saying only that the same offer had been made to other airlines. "We have regional airports all over Europe feverishly competing for our business because the simple fact is we bring shed loads of people into an area," said Mr Paul Fitzsimmons, head of communications at Ryanair.
Baden-Baden competed unsuccessfully for Ryanair's business in the past but lost out to other airports, Mr Fitzsimmons said. When the future of the Strasbourg route became uncertain because of the investigation, Ryanair made the deal with Baden-Airpark GmbH.
Mr Manfred Jung, managing director of Baden-Airpark GmbH, said Ryanair would transform the airport, until now only used for charter flights.
"We have spent three years trying to get Ryanair here. They didn't want these conditions a year ago but the Strasbourg decision changed the situation and we made a deal," he said, adding that Ryanair was anxious to cut the 14.99 per passenger cost in the coming years.
Ryanair says it hopes to return to Strasbourg once the court case is settled and to keep the Baden-Baden route running as well.
The Competition Commission of the European Commission says it has received information about subsidies paid by dozens of regional airports, including airports in Germany.
However, it will not open any further investigations until it has drawn up guidelines on using subsidies to attract airlines based on its investigation of subsidies paid to Ryanair by Charleroi Airport in Belgium.
Nevertheless, Mr Gilles Gantelet, spokesman for the Competition Commissioner Mr Mario Monti, is critical of the practice of low-cost airlines receiving subsidies, particularly when they are agreed with airport authorities in secret deals. "They say it's commercially sensitive but they are using public money; how public money is spent is not a private matter," said Mr Gantelet. "You do not use public money for commercial agreements because then, in effect, all taxpayers are paying for [budget airlines'] low prices.
"If an airport gives advantage to one company, the offer should be transparent," he said.
