Ryanair in new 'illegal subsidies' row

RYANAIR is flying into trouble in the European courts again over alleged illegal backhanders for using continental airports. Air Berlin, one of Ryanair's biggest rivals in the battle to break into the budget market in Germany, is taking Lubeck airport to court, claiming it has granted the Irish no-frills airline unfair and illegal subsidies.

Lubeck has opened up as one of Ryanair's most important battlegrounds, after its base at Frankfurt-Hahn, in its bid to win market share in Germany - the biggest aviation market in Europe. It flies six routes into and out of the city, including Stansted and Prestwick in Scotland.

Air Berlin, which operates Hamburg as one of its major bases, has filed a lawsuit claiming Lubeck is distorting competition by offering Ryanair preferential terms.

Ryanair, it is claimed, has received subsidies worth up to €10m (£7m) from the airport. Air Berlin is being supported in its action by the charter airlines of British travel operators Thomson Holidays and Thomas Cook.

The case comes as Ryanair continues to try to overturn a European Commission fine of €4m for receiving illegal subsidies to fly to Brussels Charleroi.

? Low-fare carrier Germanwings, which flies to Stansted and Gatwick, today said it has turned a profit for the first time. It aims to carry 5m passengers in 2005, a rise of 40%.