Ryanair CEO Michael O’Leary doesn’t mince his words when it comes to talking about the aviation industry. Yesterday, the executive had a strong opinion on Lufthansa. He feels that the German group is being greedy with state aid and likened it to a drunken uncle at a wedding.
Distorting the market
The Irish Times reports that the low-cost carrier is against Lufthansa subsidiary, Austrian Airlines’ request for €767 million ($831 million) in state grants and loans. Additionally, the operator is questioning tax breaks for carriers registered in France and Sweden. Ultimately, O’Leary feels that subsidies across EU governments are distorting competition within the industry.
The Irish outfit has enough liquidity to weather the initial storm of the coronavirus pandemic. With this in mind, its leadership has been reluctant to ask for government support. However, with so many airlines receiving funds, the businessman fears that Ryanair will behind once passenger activity returns.
“Lufthansa is going around hoovering up state aid like the drunken uncle at the end of a wedding, drinking from all the empty glasses. They can’t help themselves,” O’Leary said, as reported by The Irish Times.
“We don’t want state aid, but we’re now being asked to compete with not one hand, but two hands tied behind our back.”
With all these funding measures in place across the continent, O’Leary is in favor of transparent programs. It is a fan of government wage support programs as the money is available to all carriers.
However, the French and Swedish tax rebates would only benefit airlines registered in those countries. Subsequently, Ryanair has asked EU judges to cancel the Commission’s approval of €455 million ($494 million) loan guarantee for Swedish carriers.
Altogether, Ryanair is facing challenges amid the current climate. It just announced that it will not bring back 250 of its staff when it reopens its offices next month. Sites in Dublin, Stansted, Madrid, and Wroclaw are set to open from the beginning of June but with less staff. Additionally, up to 3,000 jobs are at risk as part of the company’s restructuring program in the aftermath of the crisis.
Services are starting to open up slowly across Europe as summer approaches. Nonetheless, it will still take a while before normal operations resume. Therefore, Ryanair will keep a close eye on its competition while the downturn in passenger activity continues.
Simple Flying reached out to Ryanair for comment on its financial situation amid the pandemic but did not hear back before publication. We will update the article with any further announcements.
What are your thoughts on Michael O’Leary’s recent comments about Lufthansa? Is he justified in his remarks? Let us know what you think of the situation in the comment section.