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Ryanair To Appeal EU Ruling

A day after Ryanair revealed a deal that would save its services at Charleroi Airport, the Irish carrier said on Wednesday that it would appeal against the European Commission's ruling that it received illegal state aid.

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Ryanair says it will continue to operate its Belgian hub

Ryanair, the Irish low-cost airline, will launch its appeal against the European Commission's ruling that it received illegal state aid at Belgium's Charleroi airport "early next month," according to a report published on Wednesday.

Ryanair will appeal the decision in the European Court of First Instance -- a process which could take up to two years -- in the hope of avoiding having to repay the subsidies, according to the report in the Financial Times.

The Commission ruled in February that approximately €4 million out of €15 million of incentives paid to Ryanair by Charleroi airport, which is owned by the local Walloon government, amounted to illegal state aid.

The news comes after Ryanair agreed on Tuesday to renegotiate its controversial package of landing incentives at Charleroi airport in an attempt to pacify the European Commission.

Airport and handling charges will continue for now

In the planned deal, Ryanair agreed that its cut-price airport and handling charges would continue until the airport's traffic levels reached two million passengers annually. Once this level had been met, ground handling charges would be put out to competitive tender, in accordance with EC rules.

In a bid to raise its own traffic levels, Ryanair announced that it would be in discussion with the local authority to explore the possibility of basing additional aircraft at Charleroi.

If the deal is approved, Ryanair said it would safeguard 11 of its routes from Charleroi - although flights from the Belgian airport to London Stansted will still cease at the end of the month, as planned. Last year, Ryanair flew 1.8 million passengers into Charleroi, though that will fall this year to around 1.5 million following the closure of the Stansted route.

Ryanair welcomes the agreement

Michael O'Leary von Ryanair

Ryanair Chief Executive Michael O'Leary gestures as he addresses the media in Brussels, Nov. 12, 2003. The European Commission will rule in the next days that Ryanair received illegal subsidies at Brussels Charleroi airport, German newspaper Frankfurter Rundschau reported on Sunday, Feb. 1, 2004. (AP Photo/Yves Logghe) ** zu APD7193 **

Ryanair chairman Michael O'Leary said the deal would see "the existing airport and handling charges continue for the foreseeable future," and added, "We welcome this agreement which is good news for consumers and removes uncertainty and allows our low fare services to continue at Brussels Charleroi."

However, O'Leary could not resist taking aim at the European Commission, urging the Commission not to come up with any more "screwball" decisions.

O'Leary criticizes Brussels

O'Leary said that, without the deal, Ryanair would have been forced to "close the base and move the aircraft elsewhere." Asked if Brussels had given the deal tacit approval he said: "No, the deal is done. The EU may come in and do another belated investigation and come up with another screwball finding but by then they will have bigger fish to fry, such as state subsidies to Alitalia."

A Commission spokesman said in a statement: "We have nothing to say until we receive the plan."

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