Ryanair Told To Pay Back €9.6m In State Aid

Ryanair is facing a legal battle with the European Commission after it was ordered to repay almost €10m (£7.9m) in what was found to be illegal state aid.

The no-frills carrier said it had instructed its lawyers to challenge the Commission's findings in relation to three French regional airports.

Its operations at three German airports were cleared by the inquiry.

The Commission, the European Union's executive arm, said Ryanair would have to repay €868,000 (£686,310) related to rebates and marketing arrangements negotiated at Angouleme airport in central France, from where it had ceased operations in 2009.

It found Ryanair had enjoyed "an undue advantage" and should repay the money so as to "remove the distortion of competition".

Similar findings at Pau Pyrenees airport, which Ryanair stopped using in 2011, required a repayment of €2.4m (£1.9m), with €6.4m (£5.06m) repayable at Nimes airport.

An investigation into Austria's Klagenfurt airport, where airport service and market agreements "appeared to be excessively favourable to Ryanair and therefore could involve incompatible state aid", was continuing.

The airline responded with a statement welcoming the rulings concerning Germany.

Ryanair's director of legal and regulatory affairs, Juliusz Komorek said: "Today's decisions confirm that Ryanair's airport agreements at Niederrhein Airport comply with the EU state aid rules.

"Following the closure of this case and the earlier six positive decisions at Aarhus, Bratislava, Charleroi, Marseille, Berlin Schonefeld and Tampere airports, we will immediately appeal the decisions in (the) Pau, Angouleme and Nimes cases, where the EU Commission mistakenly suggested the airports' agreements with Ryanair did not fully comply with the EU state aid rules.

"Ryanair has to date carried 86.5 million passengers at the seven airports where our commercial arrangements have been confirmed by the EU Commission and the EU Court to comply with EU law, compared to just 3.4 million passengers at the airports where the Commission today suggested the agreements did not comply with state aid rules."

It is not the first time Ryanair has fallen foul of the authorities over the past 12 months.

In October, the operator was ordered to pay fines and damages totalling £6.7m by a French court, which accused it of violating the country's labour laws.

It denied registering workers employed in France as Irish employees, preventing workplace councils from functioning and preventing access to unions.

However, the airline has also prioritised a more customer-friendly approach after coming under fire on issues including charges, compensation and baggage fees.

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Banks Face £1.5bn Hit From PPI Claims Deluge

By Mark Kleinman, City Editor

Britain's largest high street banks will announce next week that they are setting aside more than £1bn in additional provisions to compensate customers who were mis-sold payment protection insurance (PPI).

Sky News can exclusively reveal that Barclays, Lloyds Banking Group and Royal Bank of Scotland (RBS) will use their half-year results statements to the City to disclose that the big four lenders' combined bill for the PPI scandal has soared to well over £20bn.

The new provisions are understood to be being driven by an acceleration in the number of claims which relate to PPI policies sold before 2005, and have prompted urgent talks among bank executives about the conduct of claims management companies (CMCs).

Insiders said that the new top-ups could reach close to £1.5bn between the biggest banks.

To date, the PPI scandal has seen Lloyds allocating £9.8bn for compensation; Barclays has set aside £3.95bn; RBS has provided £3.1bn; and HSBC's bill has reached £2.1bn.

The sizeable new top-ups may revive calls for a so-called time-barring exercise, which would involve imposing a cut-off point for consumers to submit compensation claims.

Banking sources said on Tuesday that Barclays would account for the largest percentage of the additional compensation bill but pointed out that that was largely because it had not taken a new provision since last July, whereas some of its rivals had done so earlier this year.

The total PPI bill for Lloyds, which is 25%-owned by taxpayers, is expected to pass £10bn as a result of its new provision.

The final numbers are still being worked out with each lender's auditors, which are understood to be pushing board members to take a conservative approach to the issue by setting aside substantial sums.

The scale of the new bill will surprise many in the City, particularly after the Financial Ombudsman Service (FOS) said on Monday that new complaints fell by more than 50% during the last three months, prompting it to say that the worst of the scandal had passed.

The FOS said it had received just under 57,000 PPI-related complaints in the second quarter of the year, compared with just over 132,000 in the same period last year.

The latest wave of claims is understood to be particularly concerning to banks because many date back to before 2005, which was the reference point for an unsuccessful judicial review brought by the major banks three years ago.

Executives at major banks argue that the cost of administering even fraudulent or otherwise invalid claims can reach £1000 each, eroding their capital at a time when they are facing political demands to lend more money to small businesses.

Banks are obliged to keep customer records for seven years, meaning that many new claims relate to policies for which neither banks nor customers have an accurate record.

The British Bankers' Association (BBA) had been leading tentative discussions with the City regulator about a cut-off point for claims.

Martin Wheatley, the Financial Conduct Authority's chief executive, told MPs earlier this year that he was sceptical about the prospects of a time-barring exercise.

At the time, the BBA said: "We are working with our members on a number of aspects of PPI complaints. The ongoing work focuses on three issues as a priority: addressing backlogs, making sure that customers can be confident that the offers they receive are right and highlighting that there is no need for them to engage a claims management company.

In January last year, the FCA said it had agreed to talks with the industry about a time limit, but would insist that the banks funded a huge advertising campaign to ensure sufficient awareness of the PPI issue.

The hostility of consumer groups to a deadline appeared to kill any prospect of a deal, and it is unlikely that they would be any more enthusiastic about a deal, analysts suggested.

Barclays, Lloyds and RBS all declined to comment.

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PayPal Offers 'Faster, Fairer' Cash To UK Firms

Small firms will soon have access to a new source of funding as a debate continues to rage on the availability of cash support from banks.

From this autumn, PayPal's business customers, including those on its eBay platform, can secure working capital against their future sales in exchange for a single fee.

It did not disclose what that would be but the payment service said the funding amounted to "pay when you get paid", meaning a business only had to repay the advance with a share of their PayPal daily sales.

Nothing would be handed back on a day where no sale was made.

The move followed what the company said was a "very successful" launch of PayPal Working Capital in the United States.

It said that since the service began last September, $140m (£82m) in cash advances had been provided to small and medium-sized enterprises (SMEs).

It said money could be available to customers within minutes of the online application being submitted and that no credit checks were needed because the service did not amount to a loan.

It also confirmed there were no interest charges or late payment fees.

The company believed the service would meet a real need at a time when the Government is concerned by SMEs suffering from "long-standing challenges in accessing bank and equity finance".

Cameron McLean, managing director of PayPal UK, said: "Small businesses are the lifeblood of the British economy.

"But seven years after the start of the credit crunch, many of them are still struggling to get funding.

"According to the British Government, around a third of SMEs rely on retained earnings or the owner's own finances rather than bank or equity funding.

"This means that many find it very difficult to finance their present needs or future growth and the problem is acute for smaller, online businesses.

"PayPal is well placed to make a difference ... and we're delighted that our UK customers will be next to benefit from faster, fairer funding."

Paypal announced the service in the wake of past questions over its treatment of customers.

There were complaints about Paypal with-holding cash for up to six months - often citing security, fraud or balance concerns - allegedly pushing some firms to the brink of collapse.

The company responded by promising improved customer support.

Sky News also reported this year how it had updated its terms and conditions to warn users against sharing their computers, tablets and smartphones.

More recently, its eBay parent found itself at the centre of inquiries into a massive cyber attack that compromised the personal data of its 145 million users.

Some customers complained in web forums and on social media that they received no email warning from eBay to change their password, only learning about the cyber attack from the media.

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Apple Profits Up 12% As Microsoft Innovates

Strong iPhone sales in China have boosted Apple's profits as rival Microsoft endures a Nokia hangover.

The latest results from the two tech companies exceeded analysts' expectations but underlined conflicting challenges.

Apple investors want to see if the company can again produce a revolutionary new product, something it has not done since the iPad in 2010.

Profits rose 12% to $7.75bn (£4.5bn) in the third quarter as revenue surged 28% in China, despite stiff competition in its third-largest market.

Apple sold 35.2 million iPhones in total over the three months, with chief executive Tim Cook describing its Chinese performance as "honestly surprising" given its continuing struggles in its biggest markets of Europe and the US.

Lower-cost phones sold in China by up-and-coming rivals such as Xiaomi appeared to be grabbing market share mainly from other companies that rely on Google's Android software, Apple said.

Apple is expected to follow its rivals into the smartwatch market

Market leader Samsung admitted earlier this month that its new Galaxy S5 had sold more slowly than expected in the face of severe competition.

However, Apple's results highlighted a slump in iPad sales to half their pre-Christmas high.

Many expect Apple to now make a play for the wearable device market with a smartwatch, dubbed iWatch, and introduce two iPhone versions later this year including a 5.5-inch screen model that thrusts Apple into the market for larger-sized phones.

Microsoft updated investors on its progress just a week after confirming 18,000 job losses, mostly related to its purchase of Nokia's phones division.

Chief executive Satya Nadella, who took control from Steve Ballmer five months ago amid promises to shift its focus towards cloud computing, painted a positive picture for the future.

While fourth quarter profits fell 7% to $4.61bn (£2.7bn), dragged down by continuing losses at Nokia, revenues rose 18%, with those from commercial cloud services such as its Office 365 software suite more than doubling to an annual rate of $4.4bn (£2.58bn).

Nadella confirmed the next version of Windows would be unified across screens of all sizes.

He acknowledged the headache the company had created for software developers by making multiple versions of Windows that work differently on phones, PCs and tablets, Xbox and other devices.

Nadella said the company was aiming to simplify the platform so developers could create apps that work on many devices at once.

"We are bringing teams together to approach Windows as one equal system - very different than we ourselves have done in the past," he said.

The move was welcomed by analysts who also pointed to wider efforts to trim costs at Microsoft.

The company sold 1.1 million Xbox consoles, benefiting from a price cut on its latest Xbox One when it allowed consumers to buy it without the Kinect motion detecting sensor.

The Nokia business sold 5.8 million Lumia smartphones, although many of those were lower-priced devices.

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Royal Mail Averts Threat Of Whitehall Pay Row

By Mark Kleinman, City Editor

Royal Mail has averted the prospect of an embarrassing row with its biggest shareholder after a last-gasp decision by the Government to support its pay policies at this week's annual meeting.

Sky News has learnt that Whitehall officials were in talks with the postal operator on Wednesday morning about their concerns over some aspects of Royal Mail's remuneration policy.

Both the company and the Government refused to be drawn on the details of the impasse, but senior sources said that the Department for Business, Innovation and Skills (BIS) had decided less than 24 hours before Thursday's AGM to vote in favour of the binding resolution.

The fact that ministers had yet to take a decision about whether to support Royal Mail's pay policy so close to the shareholder vote suggests a degree of conflict that was not anticipated by the City.

Taxpayers continue to own 30% of Royal Mail, giving Vince Cable, the Business Secretary, a powerful say in the company's boardroom.

Mr Cable had signalled in March that the Government would be prepared to vote against the company if it handed Moya Greene, its chief executive, and other senior managers a pay rise in excess of the 3% awarded to the rest of Royal Mail's workforce.

However, the subsequent announcement by Royal Mail that Ms Greene would not receive a pay increase during the current financial year was expected to have defused the potential row.

"The Remuneration Committee of Royal Mail Group has decided not to propose any base pay increase or new incentive arrangements for the Chief Executive Officer," it said in May.

"In doing so, the Committee has taken into account the views and wishes of the CEO."

Taxpayers own 30% of Royal Mail

Some directors of Royal Mail believe Ms Greene is significantly underpaid as the boss of what is now a FTSE-100 company, and were irritated by what they perceived to be grandstanding by the Government.

Even an abstention on the binding pay vote would have been awkward for directors given that City advisory bodies such as PIRC have recommended not supporting Royal Mail's remuneration policy.

A public statement about the Government's voting intentions could be made in the next 36 hours, one insider said.

It is also understood to be supporting all other resolutions at Thursday's AGM, including last year's directors' remuneration report.

The vote on future pay policy is now a binding one thanks to reforms introduced by Mr Cable to make companies more accountable to their owners.

News of the talks comes the day after Royal Mail's shares slipped to their lowest level since last autumn's privatisation, amid concerns about the growing threat of competition in the key UK parcels delivery market.

A critical report published by MPs earlier this month accused ministers of short-changing taxpayers by £1bn by under-pricing the shares.

The Government sold 60% of Royal Mail to outside investors last October, including a significant chunk to more than a dozen so-called priority investors who were earmarked as long-term shareholders.

The decision by some of them to sell almost immediately sparked a political firestorm, with last week's decision by Mr Cable to launch a review of Government asset share sales interpreted as a tacit admission that Royal Mail's flotation had been imperfectly handled.

Royal Mail and BIS declined to comment.

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GSK Sees Fresh Air Ahead As Lung Drug Falters

GlaxoSmithKline (GSK) has endured a further fall in its value after cutting its earnings outlook for 2014 but raising hopes that new drugs will turn its fortunes around.

Britain's biggest drug manufacturer reported that operating profits fell 10% to £2.2bn in the first half of its financial year, with sales deteriorating by a worse-than-expected 13% in the second quarter alone.

The company blamed weak demand for its lung drugs in the US and the effects of a strong pound - the update sending its share price more than 3% lower on the FTSE 100.

It is seeking to rebuild its fortunes following a lengthy period of patent expiries and PR damage from a corruption scandal in China, where it has been accused of paying bribes to doctors to use its medicines.

The bribery allegations are also being investigated separately by the Serious Fraud Office in the UK.

The Chinese tale was complicated further last month when it emerged that historic video footage had come to light showing GSK's then-China boss Mark Reilly in an intimate clinch with a Chinese girlfriend.

GSK's under-pressure chief executive Sir Andrew Witty today admitted he continued to be worried by events in China but sought to reassure investors that GSK was on track to deliver sales growth.

He told a conference call the company expected multiple new drugs to enter the market each year for at least the next five years.

Sir Andrew has moved to focus on research and development at a time of significant change in the wider pharmaceuticals market which has seen rival AstraZeneca fight off advances from across the Atlantic.

Shire last week agreed a takeover by AbbVie.

Sir Andrew has previously described such activity as distracting and disruptive - seeking instead to trade more than £12bn of assets with Swiss firm Novartis to suit their conflicting priorities.

A big concern for shareholders has been GSK's reliance on its inhaled lung drug Advair, which accounts for a fifth of sales, as purchases fall and it prepares to face competition in Europe and later in the US.

Uptake of two further respiratory medicines has been slow though GSK said it was encouraged by strong growth in emerging markets - with its HIV business growing 13%.

Full year Earnings Per Share were forecast by GSK to be in line with those of 2013.

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Apple's Court Battle With 20,000 Ex-Employees

A court case against Apple by 20,000 disgruntled ex-employees has been granted class-action status.

The former staff members say the firm held back their wages and stopped them from taking rest breaks.

The lawsuit was originally filed in 2011 by four former Apple retail and corporate staff, who claim managers routinely made them work more than five hours without a break.

They were then withheld wages that were promised to them to make up for the extra hours worked, it is claimed.

Plaintiffs' counsel Tyler Belong said: "Very often, workers were not given meal breaks for seven or eight hours and sometimes not at all."

Rest breaks are mandated by Californian labour laws and the plaintiffs say that because they had to punch in and out of work there is evidence to back up their claims.

A California judge has given lawyers the right to represent a total of 20,000 employees who worked for Apple after December 16, 2007.

It is not the only legal battle on Apple's plate.

The company is currently trying to settle a long-running civil action over claims Steve Jobs organised non-compete agreements with other Silicon Valley firms.

It is claimed the move was an attempt to keep wages down.

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Major Airlines Suspend Flights To Israel

Major airlines from the US, Europe and Canada are refusing to fly to and from Israel after a rocket fired from Gaza landed near Tel Aviv's Ben Gurion international airport.

Delta and United Airlines suspended services between the US and Israel, while the UK's easyJet, Germany's Lufthansa, and Air France also grounded flights.

Delta Air Lines' chief executive said on CNBC on Wednesday its service into Israel would remain cancelled for now.

The Federal Aviation Administration (FAA) is meanwhile preparing to announce if its 24-hour ban on flights to Tel Aviv will be renewed.

The cancellations began on Tuesday after a Delta Air Lines flight to Tel Aviv was diverted to Paris because a rocket fired from Gaza landed near Israel's busiest air hub.

An Israeli military excavator searches for tunnels on the border with Gaza

The FAA cited in its ban the "potentially hazardous situation" caused by the ongoing conflict in the region.

The European Aviation Safety Agency then recommended all European airlines avoid Tel Aviv "until further notice".

Israel's Transportation Ministry insisted the airport was safe and the flight ban would "hand terror a prize".

Defiant former New York Mayor Michael Bloomberg said he would fly into Tel Aviv with Israeli airline El Al on Tuesday night.

He said the FAA ban would deliver "Hamas an undeserved victory".

Not all airlines heeded the ban - British Airways said its twice-daily service to Tel Aviv would continue.

Despite the advisory, Secretary of State John Kerry flew into Israel's main airport to continue the push for a ceasefire between Israel and Hamas.

He is meeting Israel's prime minister, the Palestinian Authority's president and the United Nations chief in a day-long visit to Jerusalem and Ramallah.

United Airlines planes seen at Newark International Airport

The Palestinian leadership says it has proposed a truce to mediators aimed at halting the violence.

The flight cancellations came as Israel continued its offensive in Gaza.

Israel launched a major offensive on July 8 in Gaza to stop Hamas militants firing rockets over the border.

Palestinian militants have fired more than 2,000 missiles at Israel, but many have been intercepted by its US-funded Iron Dome defence system.

More than 650 Palestinians, many of them women and children, as well as 29 Israeli soldiers and two civilians, have been killed in the conflict.

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UKTI CEO Hails 'Open' Exports Amid Russia Row

By Mark Kleinman, City Editor

The head of the Government's trade promotion agency has hailed Britain's "clear and transparent" export control regime amid a growing row over the number of UK licences allowing arms sales to Russia.

Speaking to Sky News, Dominic Jermey said he was certain that "no part" of the UK supply chain had been involved in the attack on Flight MH17, the Malaysia Airlines plane which was shot down by pro-Russian separatists as it travelled through Ukrainian airspace last week.

He said: "The key thing is to be absolutely clear about the export licensing regime we have in place; clear that we have never exported missiles or missile parts to the Russian military, and nor are we going to.

"The way we approach trading is to have a clear and transparent export control regime so that we know we are doing business in a right and proper way, and avoid any ambiguity."

His comments came on the same day that it emerged that Britain was continuing to export £132m of weapons to Russia, which the Government insisted were for civilian use only.

Sir John Stanley, chairman of the Arms Exports Controls Committee, contradicted that assertion, saying there was evidence that UK-based firms were selling missile parts.

Mr Jermey was speaking from a business conference in Glasgow held to mark the opening of the Commonwealth Games in the City.

A recent arrival at UKTI, Mr Jermey is a former British ambassador to the United Arab Emirates, and led the UK's response to the devastating Asian tsunami in 2005.

He said he was confident that UKTI could help the UK meet its Government-imposed target of doubling exports to £1trn by 2020.

"I think it is achievable if there is a step-change in the way we export," he said.

"It means getting the message out there and changing behaviour, which means UKTI working across Government.

"We have an industrial strategy, and we need to work with the private sector in a more deliberate way than we've ever achieved before."

UKTI said earlier this week that its trade promotion efforts were producing strong results, with data showing that it had attracted the highest number of inward investment projects since records began in the 1980s.

"I see UKTI really delivering, with a record number of projects," Mr Jermey said.

"It shows that the UK economy is attractive, with a predictability for long-term rates of return and stability of regulation."

He added that UKTI was now helping 40,000 British-based businesses to export, and said he wanted to see banks, accountants and law firms doing more to promote exports to their small business clients.

Mr Jermey declined to comment on UKTI's approach to September's independence vote in Scotland, saying only that it was a "decision for the Scottish people".

"We believe Scotland is better off in the UK and that the UK is better off with Scotland in it," he said.

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Govt Accused Of Russian Arms Double Standards

By Alistair Bunkall, Defence Correspondent

The UK Government has been accused of double standards over its continued arms sales to Russia.

It is still exporting £132m of weapons to Russia despite the shooting down of flight MH17 and previously promising to cancel all arms-related contracts to Moscow.

As of May, there were 285 outstanding licences allowing UK companies to export arms either to Russia or another country which might then in time sell weapons to Russia.

The Government responded by saying the licences were only weapons for civilian uses such as clay pigeon shooting.

However, Sir John Stanley, the chairman of Arms Exports Controls Committee, said details showed UK firms were selling missile parts.

William Hague said extant licences would be suspended

When asked on Sky News whether it was certain the arms were not sold for Russian military use, Sir John, a Tory MP, said: "No, I don't think that is an assumption you can make.

"If you look in detail - and we have published the entire list of the exports that are extant to Russia - if you go through the entire list I don't think that components for air to air missiles, components for air to ground missiles, components for missile launchers ... are going to go to any civilian organisation in Russia.

"They must be going to the Russian security services and defence forces."

He has written to the Foreign Secretary, Philip Hammond, asking whether the government plans to revoke the remaining licences.

In March, his predecessor, William Hague, promised "the UK will now, with immediate effect, suspend all extant licences and application processing for licences for direct export to Russia for military and dual-use items destined for Russian armed forces".

Sir John has written to Philip Hammond

However, to date, only 34 of the 285 contracts have been cancelled and the list of arms and parts UK companies still sell to Russia includes sniper rifles, body armour, assault rifles, communications equipment, small arms ammunition and night sights.

In response to the figures, the Foreign Office issued a statement saying the "majority of export licences that remain in place for Russia are for commercial use but we are keeping all licences under review".

"This Government has not approved any licences for the export of rifles or ammunition to the Russian military," the statement added.

On Tuesday, France accused the UK Government of hypocrisy for putting pressure on them over a £1bn arms contract with Moscow.

There were further questions raised for David Cameron over double standards when Labour released figures which it claimed showed the Conservatives had benefited from £1m of donations from Russian firms and individuals.

Of particular note was an alleged £160,000 payment from Lubov Chernukhin, whose husband was finance minister in Vladimir Putin's first administration, for a tennis match between the Prime Minister and Boris Johnson, with Tory strategist Lynton Crosby as ball boy.

It was an auction prize at a fundraising event.

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