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European Commission orders Ryanair to repay aid to German airport; Irish carrier to appeal

DUBLIN – The European Union’s executive Commission has ordered Ryanair to repay more than 300,000 euros ($400,000) provided by a German airport to sustain the Irish airline’s business, ruling it amounted to illegal state aid.

Ryanair says it plans to appeal Wednesday’s judgment that the airline exploited tiny Leipzig-Altenburg Airport in eastern Germany with a 2010 marketing contract that benefited Ryanair, not the airport.

The judgment concluded that the deal to promote the airport on Ryanair’s websites offered no prospect of returning a profit to the airport “even in the long term.”

Ryanair operated from the airstrip south of Leipzig from 2003 to 2011. During that period, the Dublin-based carrier rapidly expanded its route network across Europe by negotiating hardball contracts with small regional airports.

The strategy, which opened up far-flung spots to frugal travellers, also started a long-running war between Ryanair and European Union competition authorities over the deals Ryanair struck with local governments as the price for delivering tens of thousands of tourists to their sleepy burgs.

In July the European Commission ordered Ryanair to repay nearly 10 million euros ($12.5 million) in discounts and payments provided by three small French airports. Ryanair is also appealing that judgment.

In the case of Altenburg, local authorities and investors hoped to open the region to tourism and compete with another airport for Leipzig. Altenburg had been a pioneer of German military aviation, serving as an aircraft construction and testing facility in World War I, a Luftwaffe training school in World War II, and as a Russian fighter base until the Soviet Union’s collapse in 1991.

German taxpayers funded the runway’s expansion to accommodate Ryanair’s Boeing 737-800s, but the Irish experienced little success and many delays.

A low point came in March 2010 when an inbound Ryanair flight had to divert to Berlin because Altenburg’s lone air traffic controller hadn’t arrived for work. Altenburg has attracted no scheduled services since Ryanair’s departure.

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Online:

European Commission ruling, http://bit.ly/1nlIGV0