The European Commission and Ryanair have clashed on the implications of yesterday's landmark decision which will curb the incentives the airline can get at Charleroi Airport, near Brussels, write Denis Staunton in Brussels and Siobhán Creaton
Both parties agree it will lead to higher fares, but differ on the extent of the impact.
The low-cost airline said yesterday that the Commission decision was a disaster for low-fare travel and small regional airports and would inevitably lead to higher fares.
However, the Commission rejected this, saying the Ryanair deal at Charleroi had undermined other carriers, and its ruling would actually encourage development of the low-cost sector.
The long-awaited Commission decision on grant-aid which Ryanair had received from the regional Walloon government to fly to the small airport was more lenient than expected.
It followed intense lobbying by the company and politicians in Europe.
The decision will see Ryanair repay up to €4 million instead of up to €15 million, and other supports it got from the airport will be curtailed to run for five years rather than 15. It had been expected that these supports would be limited to three years.
However, despite this, Ryanair's chief executive, Mr Michael O'Leary, said the airline would appeal the ruling in the European Courts. He denounced the European Commission as "an evil empire" and said the decision was a disaster for low-fare travel all over Europe.
The EU Transport Commissioner, Ms Loyola de Palacio, had planned to use the ruling to establish guidelines for the scope of deals that could be negotiated at other airports. This didn't materialise and will now be discussed by Europe's transport ministers when they meet next month.
Ms de Palacio conceded that the ruling will result in a possible €3-to-€4 increase on each ticket to the airport. Mr O'Leary rubbished this claim and said the increase would be twice as much.
He denounced the decision as a bizarre action that sought to overturn 20 years of deregulation and competition in the EU.
"We consider this to be a disaster for consumers. It's a disaster for low-fare travel all over Europe and it's a disaster for state-owned, regional airports," he said.
Ms de Palacio dismissed this criticism and said the ruling was good news for low-cost airlines and for regional airports. The Commission wanted to guarantee equal treatment for all operators.
The Commission has asked the Belgian region of Wallonia, which owns Charleroi Airport, to respond to the decision within two months.
The Minister for Transport, Mr Brennan, said that while the outcome was disappointing for Ryanair it had won concessions that could influence the wider implications for its deals at other European airports.
"I am greatly relieved that the Commissioner listened to us and other transport ministers in not moving on general rules. Now 25 others will have an input," the Minister said.