* EU court says lower Irish air tax on short routes illegal
* Irish carriers benefited as they fly most on such routes
* Ryanair says ruling will require it to pay 12 mln euros
* Ryanair says airlines could seek compensation from govt
(Adds comment from Ryanair, Aer Lingus)
LUXEMBOURG, Dec 21 Ryanair and Aer
Lingus face paying back millions of euros in air
travel taxes after the European Court of Justice ruled on
Wednesday that they had benefited from unlawful aid from the
Ryanair, Europe's largest budget airline, said the ruling
would require it to repay 12 million euros ($12.5 million) to
the Irish government, but also said airlines would be able to
take legal action to claim compensation from the government over
Aer Lingus, which is part of International Airlines Group
, said Ireland was seeking 4 million euros, but that
this figure was being contested.
The European Court of Justice upheld a decision by the
European Commission in 2011 that lower air tax rates in Ireland
for shorter flights, including on some services to Britain,
between 2009 and 2011 were illegal subsidies.
Ryanair and Aer Lingus went to the court in Luxembourg after
the Commission said Ireland was wrong to set air tax on
short-haul flights at 8 euros ($8.32) lower per passenger than
on longer flights as it disproportionately benefited Irish
carriers who flew more short routes.
"The advantage in question did not consist in the fact that
those airlines were able to offer more competitive prices than
their competitors," the Court said in a statement.
"It resulted quite simply from the fact that those companies
had to pay a lower amount than they would have had to pay if
their flights had been subject to the standard rate."
Ireland modified its air travel tax in 2011 to a flat rate
for all flights, domestic and international, following the
Ryanair in an emailed statement said Wednesday's ruling
cleared the way for legal action by airlines to recover 88
million euros from the Irish government for the imposition of
what it described as an illegal tax.
($1 = 0.9618 euros)
(Reporting by Michele Sinner and Conor Humphries; writing by
Robin Emmott; Editing by Philip Blenkinsop and Susan Fenton)