(Alliance News) - Ryanair Holdings PLC on Tuesday again took aim at state aid in the aviation industry, with Deutsche Lufthansa AG in its cross-hairs in the wake of news it agreed a EUR9 billion bailout from the German government.
The Irish budget carrier added that it plans to operate about 40% of its normal July schedule. This followed news that Spain would remove travel restrictions on July 1, and Italy, Cyprus, Greece, and Portugal all announced plans to reopen for the key summer tourist period.
Ryanair shares were 10% higher at EUR11.75 each in London on Tuesday afternoon.
Commenting on the Lufthansa bailout, Ryanair said the cash injection will increase the flag carrier's "monopoly like grip on the German air travel market".
"The German and French governments continue to provide enormous state aid to their companies, many of whom do not need it, which distorts competition with other providers across Europe. Non-state aided airlines like Ryanair, easyJet PLC, British Airways and others, will now have to compete with Lufthansa in both the short haul and long haul markets without equivalent state aid.
"Whereas Lufthansa can use this latest EUR9 billion subsidy from the German government to engage in below-cost selling on its short haul intra-EU routes and its long haul routes."
It's not the first time Ryanair has weighed in on what it labels "state aid doping".
Earlier in May, Ryanair noted Lufthansa took EUR12.4 billion in aid, and recently renationalised Alitalia received EUR3.5 billion in government assistance. With large war chests for these rivals, Ryanair said it expects below-cost selling in the year ahead.
Chief Executive Officer Michael O'Leary said on Tuesday: "Lufthansa is addicted to state aid. Whenever there is a crisis, Lufthansa's first reflex is to put its hand in the German government's pocket. While most other EU airlines can survive on just payroll support schemes (for which we are extremely grateful), Lufthansa claims it needs another EUR9 billion from the German government, EUR1 billion from the Swiss government, EUR800 million from the Austrian government, and EUR500 million from the Belgian government as it stumbles around Europe sucking up as much state aid as it can possibly gather.
"The German government continues to ignore EU rules when it suits them to subsidise large German companies, but then lectures every other EU government about respecting the rules when they ignore them. Ryanair will appeal against this latest example of illegal state aid to Lufthansa, which will massively distort competition and level playing field into provision of flights to and from Germany for the next five years."
Ryanair said that from July 1, it will offer flights from "all over northern Europe" to key holiday hotspots like Greece, Spain and Portugal as nations begin to ease travel curbs made as a result of the Covid-19 pandemic.
"After four months of lockdown, we welcome these moves by governments in Italy, Greece, Portugal, Spain and Cyprus to open their borders, remove travel restrictions and scrap ineffective quarantines. Irish and British families, who have been subject to lockdown for the last 10 weeks, can now look forward to booking their much-needed family holiday to Spain, Portugal, Italy, Greece, and other Mediterranean destinations, for July and August before the schools return in September," O'Leary added.
By Eric Cunha; ericcunha@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
