Michael O'Leary
Michael O'Leary is gunning for a fight... and he is willing to use all available means. The Ryanair chief plans to legally tackle any move by EU to unilaterally help national airlines. Image Credit: AFP

Dublin: Ryanair Holdings Plc told Europe’s top antitrust official that it may go to court to stop France and other countries from “selectively gifting billions of euros to their inefficient flag carriers”.

Michael O’Leary, Ryanair’s CEO, said in a letter to Competition Commissioner Margrethe Vestager that the EU would be “forced into an embarrassing U-turn” on state aid if Ryanair won a legal challenge. The national programmes should be modified so that Ryanair could get a share of the bailout packages by making sure loan guarantees and other perks are available to “all EU airlines in proportion to their share of traffic in a particular country,” O’Leary said in the April 9 letter.

Ryanair’s intervention threatens to slow government efforts to shower billions of euros of aid on airlines across the region, after the coronavirus outbreak halted travel. France and the Netherlands are readying a bailout package for Air France-KLM and Deutsche Lufthansa AG, the region’s biggest carrier, has discussed a rescue from Germany and other countries. Italy wants to take over bankrupt Alitalia.

Selective saving

The European Commission declined to comment other than to say it has been in contact with several airlines, including Ryanair. The Irish airline said in a statement that it is “in contact with the European Commission to ensure that it remains vigilant and blocks any aid measures that favor “national” airlines.”

Ryanair is already a frequent flier at the European Court of Justice, fighting - and often losing - dozens of cases over aid it or other airlines got from airports across Europe in the past 30 years.

Ryanair won’t get similar help as other carriers during the pandemic, O’Leary told Handelsblatt Thursday. This risks putting the airline on the back foot compared to rivals that will get easier access to loans with a state guarantee.

That’s an outcome the EU had traditionally tried to prevent when it supervises state subsidies to companies across Europe. But regulators relaxed rules in March to allow governments to spend more than 2 trillion euros ($2.15 trillion) to support their economies amid the unprecedented pandemic.

Ryanair argues that the French programme - and Swedish and Danish loan guarantees for carriers that may largely favor SAS AB - discriminate against airlines that don’t have a license in those countries.

Ryanair flies more routes than Air France-KLM to link France with destinations in Europe and Africa, he said.