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Montpellier aid to Ryanair must be paid back: Commission

French authorities have been instructed to recover €8.5 million ($9.4 million) of illegal state aid from budget carrier Ryanair, over a marketing agreement associated with Montpellier airport.

The European Commission says the aid was incompatible with European regulations on public support.

"Certain payments by the French local authorities in favour of Ryanair to promote Montpellier airport gave Ryanair an unfair and selective advantage over its competitors," says competition commissioner Margrethe Vestager.

Investigation into the marketing agreement followed a complaint about Ryanair from a competitor a year ago.

Ryanair was operating at Montpellier up to April this year. The Commission says that payments worth €8.5 million – in exchange for promotional activity – were received by the airline and a subsidiary over 2010-17.

These payments were financed through French state resources, it adds, funded mainly by regional and local public entities.

"[They] only served as an incentive for Ryanair to maintain its operations at Montpellier airport," says the Commission, adding that France "must now recover" the illegal state aid from Ryanair.

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