Ryanair CEO: “Lufthansa Is Addicted To State Aid”

Filed Under: Lufthansa, Other Airlines

Ryanair Group CEO Michael O’Leary is one of the most controversial and outspoken people in the airline industry.

Several weeks ago O’Leary blasted the prospect of Lufthansa getting significant government aid, comparing the airline to a crack cocaine junkie:

“Lufthansa is like a crack cocaine junkie looking for state aid. They’re already getting huge payroll support from the Germany government. What do you need more state aid for? We don’t have many other costs at the moment because we’re all grounded. They see this as an opportunity to get one last huge quantity of state aid so they can go around and buy up everyone when this is all over.”

Well, this week it was revealed that the German government would be providing Lufthansa Group with €9 billion in aid, including the country taking a 20% stake in the airline group. This is in addition to the payroll support that the airline has already received.

Well, Ryanair has a big problem with this, and plans to appeal this “illegal” state aid. It’s noted that this further strengthens Lufthansa’s monopoly-like grip on the German air travel market, distorting competition.

Here’s what O’Leary had to say about this, which is quite something:

“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 €9bn from the German Govt, €1bn from the Swiss Govt, €800m from the Austrian Govt, and €500m from the Belgian Govt as it stumbles around Europe sucking up as much State Aid as it can possibly gather.

How can airlines like Ryanair, EasyJet and Laudamotion be expected to compete with Lufthansa in the short haul market to and from Germany, now that it has €9bn worth of German Govt subsidies to allow it to engage in below cost selling or buy up even more competition for the next number of years.

It is deeply ironic that the German Govt, which lectures all other EU countries about respecting EU rules, has no difficulty breaking the State Aid rules when it comes to Lufthansa. It waved through Lufthansa’s purchase of Air Berlin 2 years ago, which gave Lufthansa a monopoly in the German domestic market, and now when Lufthansa claims it needs even more State subsidies, the German Government writes a cheque for €9bn, at a time when its competitors Ryanair, EasyJet, BA, among others, do not need such State subsidies to survive.

The German Govt continues to ignore EU rules when it suits them to subsidise large German companies, but then lectures every other EU Govt 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 5 years.”

Ouch! I’m not sure Ryanair’s appeal will get the airline very far, though it’ll be something to watch.

Comments
  1. LOVE seeing Ryanair CEO pissed off.
    They treat their passengers like cattle and expect to be treated like a legacy airline.

  2. If Ryanair started playing by the rules rather than offer poverty wages they might have a case. Many employees are east Europeans as locals in higher cost north & west Europe are unwilling (and unable) to work for a pittance. Legacy carriers typically hire mainly locals, hence the economic consequences of having thousands of redundancies also has a political cost.

    Ryanair have also lost several court cases as they refused to pay local employment taxes for employees, arguing they were working for an Irish company. What comes around etc.

  3. Ryanair is an awful airline, with very bad service and while its existence has helped drive down prices overall it is a significant contributor to over-tourism and all its negative effects. State Aid is a thorny issue, but airlines, particularly global network ones are seen as essential services and have a role to play in the economy. I’m not defending LH but after flying Ryanair a few times in 2016-2017 around Europe, with chronically delayed flights, dirty airplanes, sitting among fliers who probably should have just stayed home, I’m ok with LH and other network carriers getting bailouts if it means I personally would not have to fly Ryanair ever again.

  4. I personally agree with him, I feel like it is not fair to support one airline with a huge check and leave out the rest. It will distort the competition hugely. On a side note, I also agree that this makes German government a hypocrite. I wish they complied with what they always asked others to do and they do speak like everyone is inferior, especially south european governments…

  5. A quarter of Ryanair’s routes/airport are loss making and receive some kind of state aid, subsidy or intervention… high profile cases of accepting illegal state aid In France, Spain, Germany, Italy, they fight it and loose in court every time, stretch out the appeals process to milk every penny then abandon the routes, fire the employees and start the process all over again at another struggling airport/depressed municipality, another set of Independent contractor pilots and crew that pay for their own training and are employed for less than minimum wage in a country they set foot in once a month.

    Mr O’Leary likes to accuse others of stealing to distract the public from the fact he has his sticky fingers in every money making scam and scheme he can find.

  6. Ryanair is very right with this matter and everyone complaining about them might not like them but the reality is they serve millions of people affordable flights. A lot of people wouldn’t be able to fly without the cheap prices or competition that ryanair provides.

  7. Classic German doublespeak. Hypocrites, thinking they are somehow smarter or more valuable than the rest of humanity.

  8. @Tom: sounds like a generalized and stupid prejudice. Can you give some examples of „classic German doublespeak“?

  9. @shoeguy I don’t think anybody really loves the Ryanair experience, and there’s merit to the notion that they’re a major cause of overtourism, but why do you feel some people should have just stayed at home? Are some people more deserving of intra-European travel than others?

  10. Although the suitability of the style is to be discussed, I m agree with the fact that this situation will compete and support the growth of LH on an unfair competition

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