The European Commission has told Ryanair that an incentive package arrived at between the low-cost airline and Charleroi airport is in contravention of European regulations.

European Transport Commissioner Loyola De Palacio said: "This legal decision is well balanced: it brings greater transparency into contractual relations between airlines and airports, especially regional airports."

Ryanair negotiated a discount deal to use Charleroi airport with Brussels South Charleroi Airport (BSCA), the airport's managing body, and the Walloon region authorities in Belgium.

The Commission's decision means that Ryanair has been asked to repay direct aid granted by the Walloon Region and partly by BSCA. But it should allow Ryanair to keep some of the aid already granted, but not discounts on airport charges at Charleroi, reduced ground handling fees, and any one-shot incentives.

A spokesperson for Ryanair branded the Commission's decision as one that would have "seriously negative implications for consumers, airlines and airports".

Ryanair warned that the decision would result in higher fares for consumers by forcing the low fares airlines generally to pay higher costs, and these costs will be reflected in higher fares for the travelling public.

The European Commission said the decision was "good for regional development" and one that would result in "increased development of low-cost airlines throughout the European Union, for the maximum benefit of consumers", and would offer "a level-playing field for all air transport sector operators, in order to ensure fair competition".

The President of the European Parliament, Pat Cox, said he had written to the European Commission asking for "reassurances that an assessment has been made of the possible knock-on effects and implications that a precedent set by this particular case might have for regional airports, regional development, consumer preference and service provision".

(SP)