Ryanair to Appeal Rulings on State Aid to Airlines
Ryanair has vowed to appeal a European court ruling upholding state aid for for rivals SAS and Finnair. The EU’s general court upheld Danish, Finnish and Swedish government aid for flag carriers Finnair and SAS on Wednesday.
The Irish carrier, Europe’s biggest airline, said it would appeal the ruling to the Court of Justice of the EU.
Image - Tyler McDowell
The airline argues that the aid is illegal and benefitted only the countries’ flag carriers, while all airlines have been hit by Covid travel curbs. Ryanair’s statement noted that the Finnish government granted a €600 million loan guarantee to Finnair, bringing total state aid to the airline to more than €1.2 billion. The Danish and Swedish administrations each gave SAS a €137 million loan, bringing total government support to the Scandinavian carrier to more than €1.3 billion.
Ryanair said that the European Commission’s approvals of the Danish, Finnish and Swedish aid to the airlines breached fundamental principles of EU law.
“Today’s judgments set the process of liberalisation in air transport back by 30 years by allowing Finland, Denmark and Sweden to give their national flag carriers a leg up over more efficient competitors, based purely on nationality,” a statement added.
“We will now ask the EU Court of Justice to overturn these unfair subsidies in the interests of competition and consumers.”
In the two judgements on Wednesday the General Court of the European Union found both instances were in line with EU law.
Image - Kevan James
“Finnair’s possible failure would have had serious consequences for the Finnish economy, so that the State guarantee... is appropriate to contribute to remedying the serious disruption to the Finnish economy caused by the Covid-19 pandemic,” the court said in a statement. The help for SAS “is appropriate... given that SAS has the largest market share in Denmark and Sweden”, the court also said. In both cases, it said Ryanair had failed to demonstrate how the state aid would discourage it from establishing itself in the Scandinavian countries. Ryanair said it would appeal the findings. “Today’s judgments set the process of liberalisation in air transport back by 30 years by allowing Finland, Denmark and Sweden to give their national flag carriers a leg up over more efficient competitors, based purely on nationality,” a Ryanair spokeswoman said.
“We will now ask the EU Court of Justice to overturn these unfair subsidies in the interests of competition and consumers. If Europe is to emerge from this crisis with a functioning single market, airlines must be allowed to compete on a level playing field,” the spokeswoman added.
“Undistorted competition can weed out inefficiency and benefit consumers through low fares and choice. Subsidies, on the other hand, encourage inefficiency and will harm consumers for decades to come.”
Image - Kevan James
Ryanair has been a vocal opponent of state bailouts for its rivals since national governments began propping up airlines last year. The airline has filed more than a dozen court appeals against the European Commission’s approvals of bailouts by EU governments, arguing that the aid is providing an unfair advantage over companies that go without the state support. The most closely-watched is a case against Lufthansa, which received a €9 billion government bailout deal last year.
Ryanair has cut back on staff and flights and is concerned about burning through its cash reserves as the pandemic continues to hammer the travel industry.
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