Michael O’Leary slams ‘illegal’ Lufthansa state bailout
Ryanair’s chief executive Michael O’Leary has this afternoon challenged German carrier Lufthansa’s €9bn state bailout, labelling the rescue package ‘illegal’.
In a statement, the low-cost airline’s boss said that the aid would enable Lufthansa to engage in below-cost selling which would “massively distort competition”.
He said: “Ryanair will appeal [to the European Commission] against this latest example of illegal state aid to Lufthansa, which will massively distort competition”.
O’Leary’s comments come after the German flag carrier finally secured its long-touted bailout deal, which will see authorities take a 20 per cent stake in the airline.
Finance minister Olaf Scholze said that the state intended to sell the stake as soon as the company was fit again, estimating a date of 2023.
The deal, which will see the government buy roughly €300m worth of shares, requires Lufthansa to waive future dividends payments and place limits of executive pay.
The airline, which is burning cash at a rate of €1m an hour, is hoping for a swift approval from the Commission.
Throughout the coronavirus crisis, which has battered airlines around the world, O’Leary has been a staunch opponent of state aid for airlines, saying that it was inevitable the pandemic would drive some carriers out of business.
Last month the carrier threatened to appeal to the Commission over Air France’s €7bn bailout from the French government.
The Lufthansa deal means that around the world, airlines have now received over $120bn in financial assistance from governments.
However, global industry body IATA’s chief executive Alexandre de Juniac today warned governments that giving financial aid in a form that will lead to debt – such as loans – will make recovery “longer and more difficult”.
De Juniac’s words came as LATAM, South America’s largest carrier, filed for bankruptcy today, the biggest airline in the world to do so thus far.