Ryanair to sue EU Commission over state aid

10th Jul 2007

Ryanair will sue the European Commission in the European Courts for its repeated failure to take action on a number of State Aid complaints involving Air France, Lufthansa, Alitalia and Olympic Airways, which were submitted to the Commission over a year ago. These complaints involved hundreds of millions of Euro in illegal state aids being granted by the French, German, Italian and Greek Governments to subsidise their flag carrier airlines.

Although Ryanair has called on the Commission several times to investigate these claims, the Commission has failed to do so.

Confirming that Ryanair is in the process of submitting a complaint against the Commission to the European Courts, Ryanair’s Head of Regulatory Affairs, Jim Callaghan, said:

“This is another example of the Commission’s twin track approach to state aid. On one hand they refuse to take action against serious violations of the state aid rules by national Governments to protect their flag carrier airlines like Air France, Lufthansa, Alitalia and Olympic, while at the same time they launch bogus investigations against small regional and secondary airports like Charleroi. The foolishness of the Commission’s Charleroi decision is that Ryanair now actually has a lower cost base in Charleroi.

“The Commission has failed to take any action against the following blatant abuses of the state aid rules:


The French Government’s discounting of domestic airport fees, which amounts to an illegal state aid to Air France of approximately €1bln. over the past 7 years. Meanwhile, the Commission is pursuing tiny Malta for a similar discounting of its domestic airport charges.
The German Government has allowed state owned Munich Airport to rack up losses of over €50m. p.a. on a new terminal built exclusively for Lufthansa. These losses are a massive subsidy to Lufthansa, the only occupant of this terminal. Meanwhile, the Commission is going after small regional and secondary airports like Charleroi that are offering competitive deals to airlines, like Ryanair, who are prepared to deliver huge traffic growth to these otherwise underutilised airports.
The Italian and Greek Governments have repeatedly given massive injections of state aid into their terminally ill flag carrier airlines, Alitalia and Olympic. The Commission has rubberstamped multi-billion bailout packages for Alitalia and the Italian Government is currently planning to write off hundreds of millions in losses at the national airline in order to make it attractive for sale. Meanwhile, the European Commission blocked Ryanair from taking over the small, loss making regional Irish airline, Aer Lingus. Moreover, the Greek Government has never repaid the multi-millions in illegal state aid granted to Olympic.
“It appears as always that the Commission applies one rule for the high fare flag carrier airlines and state owned primary airports, but a different one for low cost airlines like Ryanair and the numerous regional and secondary airports that are offering competition and lower fares to the travelling public. The European Commission is more concerned with protecting inefficient flag carrier airlines and hub airports than it is with actually promoting competition and the consumer interest.

“Ryanair is left with no alternative but to challenge the Commission’s failure to investigate these unlawful state aid abuses in the European Courts. Ryanair is confident that the European Court will take the Commission to task for their failure to fairly enforce the state aid rules against national Governments who continue to protect their inefficient flag carrier airlines.

“It is time that the European Commission stops this twin track approach to enforcing the state aid rules. The same rules should be fairly applied to all airlines, and an end put to the unlawful state aid to the flag carriers”.


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