Ryanair Calls On The EU To Block €3.4bn Illegal State Aid To KLM And Challenging the Lufthansa Bailout

Date 28.6.2020

Ryanair today called on the EU Commission to block the latest illegal State Aid of €3.4bn to Dutch flag carrier KLM, which equates to a subsidy of €200 on behalf of every man, woman and child of Holland. The Dutch Govt are great at preaching fiscal conservatism to other EU countries but when it comes to bailing out flag carrier airlines they write subsidy checks even faster than Mrs Merkel.

Ryanair Group CEO Michael O’Leary said:

“16 years after Air France’s takeover of KLM, every Dutch citizen now has to pay €200 each to prop-up Air France-KLM, while each French citizen will only pay a subsidy €100. This is a poor deal for the “trading nation”, which likes to lecture other EU countries about fiscal rules but has no problem breaking these rules when it comes to subsidising KLM. This Dutch government subsidy is also bad news for competition and consumer interests as it will further delay the necessary reforms at the bloated Air France-KLM.  For this €200 KLM subsidy, every Dutch man, woman and child could buy 5 flights with Ryanair, instead of paying for the failure and inefficiency at Air France-KLM.  

We call on the European Commission to block this subsidy doping to KLM, which will further reduce competition and consumer choice in the Dutch and French markets”.

Ryanair To Challenge Lufthansa Bailout

Reacting to the European Commission’s approval today (25 June) of the German Government’s €9bn bailout of Lufthansa, Ryanair’s Michael O’Leary said:

“This is a spectacular case of a rich EU Member State ignoring the EU Treaties to the benefit of its national industry and the detriment of poorer countries. Under the pretext of Covid-19, the German Government is giving Lufthansa a bank-breaking bailout of €9bn which even the airline’s own CEO admits it does not need.

In clear breach of European competition rules, Berlin is wasting vast amounts of taxpayers’ money to prop up an uncompetitive airline that should be putting its own house in order instead of once again running to the Government for help.  This and other bailouts will have a more devastating long-term effect on the future of European aviation than the pandemic itself.

This bailout money will be used to bully smaller rivals out of the market, in line with Lufthansa’s grim record of anti-competitive behaviour. Only last week, Italian press reported that Lufthansa’s Air Dolomiti was “teaming up against low-cost” with three other airlines, to introduce minimum prices. This follows reports that Austrian Airlines, also owned by Lufthansa, is gearing up to set a minimum airfare of €40.

In addition to coordinating a State-sponsored price-setting cartel, Lufthansa is threatening to shut down smaller national airlines within the Lufthansa group, as if they were its Belgian, Austrian and Swiss hostages, unless the respective governments pay a ransom.

The contrast between Lufthansa and Ryanair could not be starker.  Instead of touring Europe’s capitals for taxpayer-funded hand-outs, Ryanair is innovating its way out of the crisis by giving consumers lower fares and connectivity at a time when Europe’s regions and cities desperately need the revival of tourism and their local economies.

We urge the European Commission to stand by its principles and keep the skies open, fair and competitive. If not, the single aviation market the EU has successfully built will crumble, with European consumers and taxpayers paying the price. The Commission’s approval of the Lufthansa bailout today is a betrayal of the core principles of EU law, which we have no alternative but to refer to the EU General Court.”

 

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