The British Government is to be questioned about the financial relationship between Ryanair and the publicly-owned City of Derry airport, the European Commission said today.
The Irish Government may also be questioned after City of Derry Airport revealed in December it handed over at least £1.25m (€1.9m) of public money to Ryanair during a five-year deal.
The agreement struck in 1999 guaranteed Ryanair £250,000 (€380,000) a year from a consortium of four state-funded authorities on both sides of the Irish border to promote its Derry to London route.
A range of other taxpayer-subsidised benefits included free landing, navigation, air control, security, baggage and passenger charges.
The EC has forced Ryanair in the past to pay back up to £3m (€4.5m) in subsidies paid to it by the state-owned Charleroi airport in Belgium.
Since then, new guidelines have been introduced by Brussels governing start-up incentives to airlines from regional airports.
Derry City Council - which owns City of Derry Airport - said its deal ended last year when the new regulations were published.
The EC's Directorate General for Energy and Transports said it is writing to the UK's permanent representation in Brussels to 'determine the nature of the relationship' between the airport and Ryanair.
'This exercise is a first step to determine if there are issues of State Aid concern,' a spokesman for EC Transport Commissioner Jacques Barrot said.
Derry City Council fought a two-year battle against attempts made through the freedom of information laws to uncover the details of the payments.
It eventually released details shortly before Christmas after Britain's Information Commissioner and Information Tribunal both ordered the disclosure.
It showed Derry City Council, Donegal County Council, and the state tourist boards on either side of the Border agreed to foot the bill for Ryanair's marketing costs on the route.
Derry City Council chief executive Anthony McGurk has already admitted the airport was costing ratepayers in the region of £1.3m (€1.98m) a year.
Council management have spent £14,000 (€21.3m) on legal costs keeping the details from being made public since being asked in January 2005 how much Ryanair was paying for use of the tax payer-funded airport.
