Ryanair launches state aid complaint against Alitalia

[Av24.be]

Ryanair, Europe’s largest low fares airline, today announced that it had submitted a formal complaint to the EU Commission regarding the latest unlawful bailout of the failed Italian national carrier, Alitalia. Ryanair’s action comes after the Italian Government announced that it had reached agreement with Alitalia’s unions regarding an offer made by a consortium of Italian investors (CAI). The deal calls for another farcical renaming of Alitalia and writing off between €1.2 and €2bln worth of its debt in order to secure investors.

Ryanair has previously submitted several complaints against Alitalia and other flag carrier airlines, including Olympic, Air France and Lufthansa, against which the EU Commission has taken no action. Ryanair highlighted that this ongoing unlawful protection of flag carriers by their member state governments, which amounts to billions of euro, increasingly makes a mockery of the EU Commission’s enforcement of the state aid rules.

Announcing the complaint, Ryanair’s Director of Legal and Regulatory Affairs, Jim Callaghan, said:

“This is the latest and perhaps most blatant example of the Italian Government doing whatever it takes to protect their failed airline, Alitalia. It is also the second time that they have used the trick of simply shifting debt out of the airline and into a subsidiary in order to keep the airline afloat. In this instance, the Italian government is writing off up to €2bln. in Alitalia debts and is guaranteeing the investments by the members of the consortium and underwriting huge concessions to the unions in exchange for their agreement to these ludicrous plans.

“However, despite the blatant nature of the Italian Government’s breaches of the EU state aid rules, we have no doubt that the EU Commission will again rubber stamp this unlawful bailout, as they did 3 years ago and more recently in a similar case involving Olympic. In such case, Ryanair will appeal this decision to the European courts to expose the corrupt and biased application by the Commission of its own state aid rules.

“Ryanair has already been forced to take several cases against the Commission for its failure to take action against other blatant breaches of the state aid rules by member state governments to protect and bail out their inefficient flag carriers. These repeated failures by the Commission are contributing to a massively distorted playing field in European aviation.

“Ryanair will continue to expose the biased and corrupt application of the state aid rules by the European Commission to ensure that economically and environmentally unsustainable airlines like Alitalia and Olympic Airways are forced to exit the market – which is what is supposed to happen in a free market”.

Ryanair press release, 2 October 2008, Dublin

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Ryanair is obviously right. But the European Commission, as usual, will cave in to the requests of the most powerful of its Member States. And Alitalia will be relaunched without the heavy debt burden that will be passed on to the Italian taxpayer.

Did you say "unfair competition"?

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EU court rules against Ryanair in airline battle

Ryanair’s challenge to last year’s ruling by the European Court of Justice that Alitalia could sell part of its fleet has today been dismissed.

The Dublin-based airline brought action against the European Commission, Italy and the Italian carrier in 2012 when Alitalia was given permission to sell its assets – despite receiving illegal from the Italian government.

At the time, the General Court dismissed Ryanair’s suit and upheld the decisions made by the Commission to clear the sale of 90 Alitalia planes to Italian investors. Further contest and "all the arguments" brought by Ryanair have been quashed in a judgement by Luxembourg-based court.

In 2008, the Italian government lent €300 million to the state airline, which was insolvent at the time with its assets were to be sold at market price. Though the Italian loan was not legal, the sale of the planes was in line with EU law, according to the EU court.

It upheld last year’s judgement that Alitalia could sell some of its planes, despite significant state funding.