Ryanair jet impounded in Bordeaux over €525,000 State Aid recovery proceedings

A Ryanair (RYA) Boeing 737 was impounded by the French civil aviation authority, DGAC, on Thursday, 8th November at Bordeaux–Mérignac Airport (BOD) forcing 149 passengers who had been due to fly to London Stansted (STN) airport to de-plane and wait five hours for another flight due to the failure by the Irish based airline to repay €525,000 (£458,000) owing to the French authorities.

The origins of the imbrilligio lay in financial subsidies by the French state to Ryanair for operating flights from Angoulême regional airport between 2008 and 2009, which the European Commission later deemed illegal (SA.33963).

As a matter of principle, EU State aid rules require that incompatible state aid is recovered without delay in order to remove the distortion of competition created by the aid. There are no fines under EU State aid rules and recovery does not penalise the company in question. It simply restores equal treatment with other companies.

In the intervening period whilst the airline had paid back almost half of the illegal subsidies it had received, the balance of €525,000 still remained outstanding, despite a final payment demand being issued in May this year.  Media reports indicate that Ryanair has now settled its debts, allowing it to recover its plane.

A statement from France’s aviation authority, DGAC, read:

“By this act the French state reaffirms its desire to guarantee the conditions of fair competition between airlines and its airports,” adding that the move to seize the plane was a “last resort” after several failed efforts to reclaim the debt; adding that the disruption to passengers was “regrettable”.

Passengers who were supposed to board the grounded flight were put on another plane that left five hours later, ironically triggering individual compensation payments of €250 per passenger due to the application of an unrelated European legislation (Regulation 261/2004) for delays incurred.

The events are a salutary reminder that following a Commission order for recovery of State Aid, the Member State concerned is required to recover the aid “without delay” in accordance with domestic law (OJ 2007 C272, 15.11.2007).  Failure by a Member State to recover State Aid can, and does, lead to the Member State itself being referred by the European Commission to the European Court of Justice in accordance with Article 108(2) TFEU.

This is not the end of Ryanair’s seemingly on-going game of cat and mouse with European competition regulators, with the Commission announcing last month that it was initiating an in-depth investigation into a series of agreements the airline had entered into with the operator of the German airport of Frankfurt-Hahn, FFHG, and the Land of Rhineland-Palatinate (see IP-18-6222).

Image courtesy of Pixaby.com and licensed under Creative Commons CC0.