Ryanair To Challenge Lufthansa Bailout

25 Jun 2020

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.”