France has been ordered by Brussels to recover nearly €9 million from low cost carriers Ryanair and Jet2 after it found that the carriers had received unlawful state aid at La Rochelle airport.

In the aviation sector, the European Commission’s rules on state aid to airports and airlines allow public money to be used by regional airports or regional authorities to attract ‘price-sensitive’ airlines in the form of low airport charges, discounts to airport charges, success fees or payments for marketing services in an effort to stimulate traffic.

However, if payments go beyond what a profit-driven operator would be prepared to offer under the same circumstances the Commission has a duty to examine whether those payments are compatible with EU state aid rules. If it finds that the public money has been wrongly offered EU rules require that any incompatible state aid is recovered in order to remove the distortion of competition in order to restore a level playing field.

On 8 February 2012 the Commission opened an in-depth investigation to assess whether financial arrangements between the French public authorities and the airport of La Rochelle, as well as rebates and marketing agreements concluded between this airport and some of the airlines using it, were in line with EU state aid rules.

The Commission considered that several airport services agreements and marketing services agreements concluded by La Rochelle airport between 2003 and 2010 with Ryanair and Jet2 did constitute incompatible state aid and has now directed that France must now recover from Ryanair and Jet2 sums amounting to €8.4 million and €81,000 respectively.