The European Commission is to investigate a deal struck between Ryanair and the Walloon government to keep the Irish low-cost carrier flying to South Brussels Charleroi airport.
The Walloon government said on Friday that it and Ryanair had reached an agreement over subsidies under which the fees levied on the carrier would remain unchanged.
By adjusting local taxes for all carriers arriving at Charleroi, Ryanair will pay no more than the €5 per passenger it is currently charged for its 11 routes into the airport.
However, the deal will have to be renegotiated once Charleroi starts to handle more than two million passengers a year, because beyond that point the Commission has ruled that the airport's subsidies must end.
Last year, 1.8 million passengers flew via Charleroi.
It also comes too late to save Ryanair's service from London's Stansted airport to Charleroi, which will be cut at the end of this month. This route served 150,000 passengers last year.
The Walloon government has also suspended plans for a $100 million new airport terminal, capable of handling four million passengers a year, because of uncertainty over new Commission rules on airport subsidies.
In February, the Commission outlawed some of the subsidies Ryanair was receiving from the Walloon government and ordered the airline to repay up to €4.5 million.
Wallonia and Ryanair hope to meet the Commission's desire for fairness by cutting the passenger tax from €7 to €1 and raising the handling tax from €1 to €3 for each person arriving at Charleroi. The landing tax will be frozen at €1 per passenger.
A Commission spokesman said the Belgian government had yet to present a plan to implement the Commission's February ruling.
"If Friday's discussions fall within that framework, it will have to be notified and investigated by the Commission," he said, emphasising the Commission had not seen a copy of the agreement.
Ryanair is due to make a statement about the deal tomorrow. It accounts for 90 per cent of the passengers at Charleroi with the rest coming from French and Polish charter flights.
The Commission is due to present new guidelines on airport subsidies and all airline contracts this year. - (Financial Times Service)
