Air France is suing Ryanair over local subsidies

Mar 11, 2010, 13:40 GMT

Paris - French airline Air France said Thursday it has filed a complaint with the European Commission against Ryanair over subsidies its Irish low-cost rival is allegedly receiving from French regional and local airports.

'Ryanair's agreement to serve these airports is conditional on the airport authorities' granting aid to it,' Air France said in a statement posted on its web site.

'Such measures, taking the form of reduced airport taxes, preferential ground handling rates at certain airports or marketing aid, have been implemented by at least 25 French regional airports.'

According to the daily Le Figaro, Air France has calculated that Ryanair receives some 660 million euros (900 million dollars) in such subsidies in Europe each year, 35 million euros in France alone.

Air France charged that the aid is 'contrary to European regulations' and is 'often financed by the airport taxes paid by other airlines at these airports.'

The company said it had filed the complaint in Brussels at the end of November 2009.

Contacted by Le Figaro, Ryanair denied receiving any state aid whatsoever.

'It is Air France that is receiving illegal aid in the form of airport tax discounts on its domestic lines,' a spokesman for the company was quoted as saying.

The suit is the latest skirmish in a lengthy and often bitter competition between the two carriers.

In 2006, Ryanair filed two complaints against Air France - one charging that the French carrier had received almost 1 billion euros in illegal state aid and another accusing it of trying to block competition.

Ryanair has also attacked other state airlines, such as Germany's Lufthansa and Alitalia, saying they benefited from illegal subsidies from their respective governments.

Ryanair has been the target of suits filed by other European airlines on allegations similar to those made by Air France.