Ryanair seeks to shoot down Lufthansa’s rescue at EU court

Bloomberg

Ryanair Holdings Plc sought to shoot down Germany’s multibillion euro bailout for Deutsche Lufthansa AG, asking a European Union court to cancel EU
approval.
Germany’s 6 billion-euro ($7.3 billion) recapitalisation and a state guarantee for a 3 billion-euro loan “discriminates unlawfully between EU airlines,” Ryanair said in an emailed statement. The carrier filed its challenge at the EU’s General Court.
“It is extraordinary that Lufthansa announced it did not need so much state aid, yet the German government was committed to favouring its ‘global champion’ instead of putting measures in place to support air traffic recovery in a manner that would benefit all airlines delivering traffic at German airports,” Ryanair said.
Ryanair is challenging more than a dozen state bailouts for airlines across Europe over concerns the cash boost for rivals will allow them to emerge stronger, slash fares and swallow up others.
The Irish company fears burning its own cash reserves while others get government rescues.
Its legal filings target European Commission approval for state support, claiming the EU regulator isn’t living up to its task of ensuring governments don’t unfairly help a favored company at the expense of others. The EU court can cancel such approvals. The regulator has been under pressure to approve unprecedented state aid to save the
pandemic-struck European economy. The commission declined to comment beyond saying it will defend all decisions at court. The German finance ministry declined to comment, while Lufthansa didn’t respond to requests for comment.
Lufthansa fought against EU demands last year that it make concessions, including key airport slots at Frankfurt and Munich, to balance out the harm to competition from the aid. Those terms effectively prevent Ryanair from taking the slots at Frankfurt as they are only available initially to new entrants at the airport.
The commitments “are totally inadequate to remedy the distortion of competition,” Ryanair said. Last year, Michael O’Leary, Ryanair’s combative chief executive officer, accused Lufthansa last year of “going around hoovering up state aid like the drunken uncle at the end of a wedding, drinking from all the empty glasses.”
European carriers are among the worst companies affected by Covid-19 as governments restrict travel to prevent the virus from spreading. With profits heavily dependent on April through September, another lost summer this year could reach beyond industry stragglers and strike at leading low-cost carriers and tour operators.