Biggest threat to cheap flights

PASSENGERS are facing the biggest threat yet to cheap flights to Europe after low-fare airline Ryanair said it has lost a crucial court ruling in Brussels.

Although no formal decision has yet been published, Ryanair said Brussels is set to rule that incentive payments it receives from local authority airports amount to illegal aid.

Among the worst hit passengers will be the thousands of owners of second homes in France who now risk being 'cut off' from their rural retreats.

Today Ryanair boss Michael O'Leary said the European Commission decision would do 'untold damage' to the low-cost flights market in Europe.

It could mean axing routes, raising fares or switching services to other airports that are not hit by the ruling.

The decision relates specifically to a test case involving Charleroi airport near Brussels. The carrier has said it will appeal against the decision and could shut down its Charleroi operation until the case is heard.

The airline has already said it planned to axe three underperforming French routes - thought to be Brest, Clermont-Ferrand and St Etienne.

Ryanair established Charleroi as its first continental hub two years ago after the airport, owned by the Wallonian regional government, offered millions of euros both in direct payments for flying there and indirectly by free marketing and in providing staff accommodation.

The Commission says this is illegal because Belgian taxpayers are effectively subsidising Ryanair.

Attacking the Commission's 'manifest error', O'Leary said the Charleroi matter may be 'Ryanair's Waterloo'.