Threat to low-cost airline flights

Budget flights to a string of popular European destinations are under threat today.

Low-cost operator Ryanair may be forced to axe a raft of its routes to the Continent after French judges ruled that a subsidy given to the firm was illegal.

Flights to 18 airports across France are in doubt after the ruling, which puts the low-cost flights revolution under threat.

A separate European Commission investigation has now been launched into Ryanair flights to Charleroi airport south of Brussels, and could have implications for destinations across Europe.

The airline, which saw passenger numbers soar to two million last month alone, has had to axe one route already after the French court's decision, which could also threaten its expansion plans.

Ryanair is appealing against the French ruling, but depending on the outcome - and that of the EC investigation - popular destinations including Bergerac, Limoges, Carcassonne, Bologna and Palermo are understood to be among routes which could be affected. The destinations had attracted thousands of British travellers because of flights which average only £34 each way - a fraction of what major carriers charge.

Some passengers have even bought holiday homes on the strength of the cheap flights and commute at weekends from London.

In a case brought by state-owned airline Air France, the French court ruled that a £1 million-a-year sweetener given to Ryanair to fly into Strasbourg breached European competition guidelines and must be withdrawn.

The money, from Strasbourg Chamber of Commerce, went straight to Ryanair. It was deemed by the court to be a breach of rules which prevent unfair subsidies being given to airlines using publicly-owned airports.

Ryanair has now cancelled the flights - which carried 15,000 people a month to the French city - from 24 September, saying the route is only viable with the subsidy.

It now faces court action over a series of other routes where local councils and business groups are providing subsidies to bring tourists to their area by giving Ryanair cheap access to publicly owned airports.

Marc Lamidey, chief executive of Air France subsidiary Brit Air, which brought the case, said: "This could be a test case which would affect other airports."

The European Commission's probe into the deal which lets Ryanair fly to Brussels Charleroi airport for as little as £10 could produce a double-whammy for the airline's passengers. The company is given cut-price landing, free hotels for its crew, and help with the cost of training and advertising by the local regional government.

The Commission, which has massive powers to stop such deals and fine the companies involved, is expected to rule in October on whether it can continue.

Today Ryanair vowed to appeal against the ruling, and in the meantime seek other routes anywhere it faced court action. A spokesman for Ryanair said that if they lost their case, they would simply switch to using other, privatelyowned airports nearby.

"All the airports compete and the one with the best deal will get our business. The key to this case is whether public airports are allowed to compete with private airports nearby. If we are not allowed to fly into public airports we will be forced to use private airports instead," he said.

Chief executive Michael O'Leary said: "It is wrong that the state-aid rules can be misused by high-fare flag carriers to limit competition, consumer choice and low fares."

Simon Evans, chief executive of the Air Transport Users Council, said: "In this case the ruling would appear to be against the consumer's interest because Ryanair provided a much more cost-effective service for passengers."

EasyJet, the other major budget operator, is unaffected by the ruling, as none of the airports it flies to are publicly subsidised.