Ryanair (FR, Dublin International) has instructed its lawyers to contest a European Commission (EC) decision to force the airline to repay nearly EUR10million (USD13.49million) in illegal state aid extended to it by the French airports of Pau, Nîmes Garons, and Angoulême.

After a lengthy investigation into public aid measures to airports and airlines relating to the aforementioned French airports, three airports in Germany (Dortmund, Leipzig/Halle and Düsseldorf Weeze) and Klagenfurt in Austria, the Commission exonerated the latter four while condemning marketing arrangements the three French airports had concluded with Ryanair and its subsidiary Airport Marketing Services.

Following the announcement, Ryanair disputed the findings claiming all its airport arrangements do in fact comply with EU state aid rules.

"Today's decisions confirm that Ryanair's airport agreements at Dortmund and Niederrhein airports comply with the EU State aid rules (Market Economy Investor Principle). Following the closure of this case and the earlier six positive decisions at Aarhus, Bratislava, Brussels Charleroi, Marseilles, Berlin Schönefeld and Tampere airports, we will immediately appeal the decisions in Pau, Angoulême and Nîmes cases where the EU Commission mistakenly suggested that the airports' agreements with Ryanair did not fully comply with the EU state aid rules," the LCC said in a statement.

In the case of Angoulême, a French local airport in Charente (Poitou-Charentes region), the EC said contractual rebates and marketing arrangements concluded between the airport and Ryanair/AMS in 2008 amounting to EUR0.868million (USD1.12million) did give the carrier an undue economic advantage over its competitors.

"The agreements could not have been reasonably expected to improve the financial situation of the airport when they were entered into, and no private operator would have accepted to grant similar conditions to the airline in similar circumstances," the ruling read.

In the case of Pau, a regional airport in the Pyrénées-Atlantiques department (Aquitaine region), the EC found that airport service agreements and marketing arrangements concluded between the local chamber of commerce (Chambre de Commerce et d'Industrie de Pau-Béarn - CCIPB) and Ryanair/AMS between 2003 and 2011, as well as a contract signed with Transavia France (TO, Paris Orly) in 2006, gave these companies an undue economic advantage over their competitors.

"The Commission found that this aid was mere operating aid granted without furthering any objective of common interest and which could not be declared compatible with the internal market. The beneficiaries therefore need to pay back this undue advantage (around €2.4 million for Ryanair/AMS and around €400 000 for Transavia), in order to remove the distortion of competition the incompatible aid has created," the ruling read.

In the case of Nîmes, a small regional airport in the Gard department (Languedoc-Roussillon region), the EC investigation found that airport service and marketing agreements concluded between the local chamber of commerce (Chambre de Commerce et d'Industrie de Nîmes – Uzès – Le Vignan - CCIN), airport operator (Veolia Transport Aéroport de Nîmes - VTAN) and Ryanair/AMS between 2000 and 2010 provided these companies with an undue economic advantage over their competitors.

"The Commission found that this aid was mere operating aid granted without furthering any objective of common interest and which could not be declared compatible with the internal market. Ryanair/AMS therefore need to pay back the undue advantage of around €6.4 million that they have received, in order to reduce the distortion of competition created by the incompatible aid," the ruling read.

At present, Ryanair only serves Nîmes having pulled out of Pau in March 2011 and Angoulême in October 2009.