Ryanair to oppose €800m subsidy to rival Austrian Airlines

Ryanair says it will oppose the near-€800 million government aid to rival Austrian Airlines but does favour transparent support for European airlines hit by the Covid-19 travel shutdown.

The Irish group recently asked the EU's courts to overturn a scheme under which the French government is allowing only airlines registered in France to delay an estimated €200 million in tax due this year until 2022.

Ryanair said on Wednesday that both it and its Vienna-based subsidiary, Laudamotion, would oppose the subsidy that the Austrian government is giving to Austrian Airlines, which is part of German group Lufthansa.

Austria’s government has been in talks with Lufthansa since last month over an aid deal worth €767 million, consisting of grants and loans.

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Ryanair confirmed that it favoured EU government supports for airlines that are transparent and available to all carriers, and thus are not state aid. This includes payroll support schemes and UK government loans.

“Ryanair will not apply for, and won’t receive any state aid such as the illegal French government rebate of aviation taxes only to French-registered airlines,” the group said.

It added that Laudamotion would not apply for or receive “any of the €800 million Austrian state aid subsidy” being granted to Austrian Airlines.

‘Illegal state aid’

“This is illegal state aid which Ryanair and Laudamotion will oppose,” a statement said.

EU competition law bans state aid that distorts normal commercial competition.

However, the European Commission on Wednesday indicated that it would allow some flexibility on these rules in an effort to put the bloc's travel and tourism industries back on the road to recovery.

Tourism is worth about €150 billion a year to the EU, but Covid-19 travel lockdowns have frozen travel in Europe and many other regions. Airlines have grounded more than 90 per cent of their passenger fleets as a result.