In typical Ryanair fashion, the airline’s CEO, Michael O’Leary, has come out against two recently approved bailouts for both Lufthansa and KLM. While O’Leary has previously likened Lufthansa to a drunk uncle at a wedding, he today called KLM’s rescue ‘illegal state aid.’
Since the start of the current pandemic, Ryanair’s O’Leary has been incredibly vocal against airline bailouts in Europe. Indeed, Simple Flying previously reported that the Irish low-cost airline had instigated action in Sweden against another airline bailout. Now, the Irish airline is seeking to disrupt bailouts bound for both KLM and Lufthansa. Let’s find out more.
Starting with Lufthansa
Let us start with Lufthansa. Yesterday, the airline’s shareholders voted overwhelmingly by over 98% to approve a €9 billion ($10.1 billion) government bailout. The vote was reached at the end of a 6-hour meeting that over 600 questions had been submitted to. Now, the airline can access €9 billion in exchange for giving up some valuable assets such as slots.
However, Ryanair isn’t happy with this aid. In a statement released yesterday by the airline, O’Leary said,
“This is a spectacular case of a rich EU Member State ignoring the EU Treaties to the benefit of its national industry and the detriment of poorer countries. This bailout money will be used to bully smaller rivals out of the market, in line with Lufthansa’s grim record of anti-competitive behaviour.”
What about KLM?
Today KLM came to an agreement with the Dutch government regarding funding to help it weather the COVID-19 crisis. The airline has today secured €3.4 billion ($3.8 billion) in funding from the government. According to Ryanair, this equates to €200 per dutch citizen. On KLM’s bailout, O’Leary said:
“16 years after Air France’s takeover of KLM, every Dutch citizen now has to pay €200 each to prop-up Air France-KLM, while each French citizen will only pay a subsidy €100… For this €200 KLM subsidy, every Dutch man, woman and child could buy 5 flights with Ryanair, instead of paying for the failure and inefficiency at Air France-KLM. We call on the European Commission to block this subsidy doping to KLM…”
What do others think?
Not everybody is against airline bailouts, however. Last week Simple Flying caught up with the airBaltic CEO, Martin Gauss. Speaking exclusively to Simple Flying, Gauss likened airline bailouts to repairing infrastructure after a war.
He said that nobody would think twice about paying to repair roads after a war, so why should we stop air bridges being repaired? Additionally, Gauss pointed out that if Lufthansa, for example, were to cease operations overnight, the impact would be felt not just in Germany, but also across the world.
As for Ryanair, the airline is looking to kickstart its schedule on the 1st of July, with over 1,000 daily flights. In the meantime, the airline has been operating a severely reduced skeleton schedule of around 20 routes a week.
What do you make of O’Leary’s comments? Do you agree with him? Let us know your thoughts in the comments!