AFLYY Air France ADS (PK)

By Anthony O. Goriainoff

Ryanair Holdings PLC said Tuesday that it would appeal the European Commission's decision that France must recover 8.4 million euros ($8.6 million) in state aid received by the budget airline, deemed incompatible with European Union regulations.

The Irish low-cost carrier said it would appeal this decision to the EU General Court and continue "to make efforts to explain the dynamics of the liberalized air-transport market to the European Commission's competition services."

"Having waved through over EUR40 billion in illegal state aid to Europe's failing legacy airlines over the past two years, including EUR14.4 billion to Air France KLM from the French and Dutch governments, EU Commissioner Vestager now bizarrely concluded that Ryanair's successful partnership with La Rochelle airport in France involved EUR8.4 million of state aid," the airline said in a statement.

The EU's executive branch said Tuesday that the French government must recover the money from the budget airline after several contracts with La Rochelle airport between 2003 and 2010 constituted illegal state aid.

U.K. carrier Jet2 PLC will also have to repay EUR81,000 in French state aid due to similar contracts signed with the airport, the European Commission said.

The contract conditions gave an unfair advantage to both airlines over competitors as a profit-driven airport operator would unlikely have granted such conditions, it said.

Although public airports can offer airlines attractive conditions to stimulate traffic, these shouldn't go beyond what a profit-driven airport operator would be willing to offer under the same circumstances, following the market economy investor principle, the commission added.

"If this principle is not respected, the conditions constitute state aid and the Commission must then verify whether they can be considered compatible with the EU rules on state aid," the European Commission said.

Write to Anthony O. Goriainoff at anthony.orunagoriainoff@dowjones.com

(END) Dow Jones Newswires

July 26, 2022 11:07 ET (15:07 GMT)

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