Brussels has put limits on the incentives that publicly-owned regional airports can offer to attract new business, a move that could hit budget fliers like Ryanair.
The EU Commission yesterday announced the proposals, which cover local authority or state-owed regional airports with annual passenger volumes of less than five million.
Under the ruling, airport authorities cannot offer airlines intending to launch new services from their airports more than 30 per cent to 50 per cent of the cost of launching those services.
The service benefiting from the aid must ultimately prove profitable. For this reason, the commission wants the support to reduce every year and to be limited to a maximum of three years, or five years in the case of disadvantaged airports in the "outermost" areas of the EU.
Transport commissioner Jacques Barrot said yesterday that the rules would give regional airports the legal certainty they needed for their future development and for their relations with airlines and the authorities. They will not apply to ports owned by private companies.
Controversy blew up around the incentives and supports offered by airports to airlines early last year when the EU Commission ruled that a package given to Europe's biggest low-cost carrier, Ryanair, by Charleroi Airport in Belgium amounted to illegal state aid. The regional authority owns the airport.
Brussels sought repayment of €4 million from Ryanair. The company is appealing the ruling, but has put the €4 million in escrow pending the outcome.
The ruling announced yesterday applies to all airlines, but in practice will affect low-cost carriers more than others, as they favour regional airports for their flights.
Ryanair chief executive Michael O'Leary yesterday rubbished the ruling, arguing that it would put publicly-owned regional airports at a competitive disadvantage.
"The commission has outdone itself with these discriminatory guidelines, which will destroy the competitiveness of many publicly-owned regional and secondary airports around Europe," he said.
He said that these airports were trying to attract passengers by offering lower costs and more efficient services to airlines, which in turn translated into lower air fares for consumers.
A Ryanair spokeswoman said that the rules would not affect any of the airports to which the airline is currently flying in Europe. However, it is in talks with 50 other regional hubs.
