Is the EU trying to kill-off Ryanair?

jetsonx

In Germany, France and Italy – all of their so-called flag-carrier airlines are getting bailed out.

Air France-KLM - 10 Billion
Lufthansa - 9 Billion
Alitalia - 600 million + nationalised
Ryanair - 0

Say what you like about Ryanair but it has done more to open up Europe than any of these airlines. Ryanair has done more to integrate European citizens any directive from Brussels.

Yet, the bureaucrats in Brussels, the people who are meant to espouse fair competition, now seem intent on using this pandemic to kill off Ryanair.

What do you think?

KiKi III

jetsonx wrote: »

In Germany, France and Italy – all of their so-called flag-carrier airlines are getting bailed out.

Air France-KLM - 10 Billion
Lufthansa - 9 Billion
Alitalia - 600 million + nationalised
Ryanair - 0

Say what you like about Ryanair but it has done more to open up Europe than any of these airlines. Ryanair has done more to integrate European citizens any directive from Brussels.

Yet, the bureaucrats in Brussels, the people who are meant to espouse fair competition, now seem intent on using this pandemic to kill off Ryanair.

What do you think?

What do those other airlines have in common that Ryanair doesn’t?

suicide_circus

Ryanair will still come out on top. Those "flag carriers" need bailouts because they're bloated and inefficient and they will remain so.

donvito99

Ryanair will survive despite those bail outs - it has a mountain of cash, owns the majority of its fleet and with smaller carriers going bust is better placed than the likes of Lufthansa or IAG to sweep in and take that market share.

CalamariFritti

I don't know enough about competition governance but basically some countries bailed their state carriers out. That may or may not be legal or create an unfair advantage. Its not actually the EU bailing them out, its the individual countries. It may be for the EU decide however whether that's unlawful or not.

If if was anyones role to bail Ryanair out or not it would be the Irish state?

martingriff

jetsonx wrote: »

In Germany, France and Italy – all of their so-called flag-carrier airlines are getting bailed out.

Air France-KLM - 10 Billion
Lufthansa - 9 Billion
Alitalia - 600 million + nationalised
Ryanair - 0

Say what you like about Ryanair but it has done more to open up Europe than any of these airlines. Ryanair has done more to integrate European citizens any directive from Brussels.

Yet, the bureaucrats in Brussels, the people who are meant to espouse fair competition, now seem intent on using this pandemic to kill off Ryanair.

What do you think?

You answered your own question. There the countries flag carriers. Ryanair are not. I doubt those counties are bailing out other non flag carrier companies. It's not just Ryanair. Ryanair will be fine with Michael O'Leary at the helm

martingriff

CalamariFritti wrote: »

I don't know enough about competition governance but basically some countries bailed their state carriers out. That may or may not be legal or create an unfair advantage. Its not actually the EU bailing them out, its the individual countries. It may be for the EU decide however whether that's unlawful or not.

If if was anyones role to bail Ryanair out or not it would be the Irish state?

You will be damn sure they be looking for there share (and I think rightly so) if Aer Lingus will receive something

GocRh

jetsonx wrote: »

In Germany, France and Italy – all of their so-called flag-carrier airlines are getting bailed out.

Air France-KLM - 10 Billion
Lufthansa - 9 Billion
Alitalia - 600 million + nationalised
Ryanair - 0

Say what you like about Ryanair but it has done more to open up Europe than any of these airlines. Ryanair has done more to integrate European citizens any directive from Brussels.

Yet, the bureaucrats in Brussels, the people who are meant to espouse fair competition, now seem intent on using this pandemic to kill off Ryanair.

What do you think?

Well for one Ryanair are very 'creative' when it comes to accounting and where they have bases. Employees are often paid below what legacies pay, and sometimes forced to take contracts elsewhere in the EU where costs are lower.


Not a great employer but indeed a very lean and efficient operation.


I wouldn't say the EU never helped Ryanair, I think you're taking a rather narrow view on what the EU effectively does. The ability that Ryanair have to fly an Irish registered plane anywhere in Europe, to have bases of operation in cheaper EU states, all of that is based on the integration and mobility that the EU enabled.


By the way, the EU isn't bailing out any airline. The member states (Germany, Spain, France) are. All that the EU did was indicate that it will not consider state intervention as result of the pandemic a unfair state subsidy.


You should be blaming the member states and greedy airlines (IAG posted record profits for years) before blaming the EU.

CrankyHaus

This was always going to happen, the CEO of Lufthansa said as much in an interview with Der Spiegel back in early March.

It's less the EU trying to kill off Ryanair than flag-carriers relying on their country to keep them afloat. It's a strategic interest to maintain them so no country with the wherewithal to do so will think twice.

Arguably the EU favours the big boys in Europe when it comes to permitting state aid - for example by approving the German bailout of Condor last year.

It's a bad deal for Ryanair but I'm told by people in the industry that they should get through it.

FVP3

Interesting that Ireland is accused of state aid for Apple. I suppose the existing State owned companies are protected from that legislation.

whippet

as a réponse to the actual title of the thread

Is the EU trying to kill-off Ryanair?

I'd ask how would anyone think that getting rid of Ryanair would be beneficial to the EU? - it is very much in the interest of the EU and it's bureaucrats to have cheap, frequent and reliable transport for millions of EU citizens across the continent.

So, in response No; the EU isn't actively trying to kill off Ryanair.

On the other hand they are allowing individual state to ensure as best they can the flag carriers who would provide the uneconomic routes that they likes of Ryanair wouldn't touch with a barge pole.

When MoL agrees to operate flights on routes and times that are not economical I'd suggest he might have more of a chance of getting a hand out

jetsonx

Even taking into account the other airlines are flag carriers, it seems unfair.

It's like two bakers. Both feed their local populations. A pandemic hits. Baker A is given a massive cheque by a third-party who continually preaches about level playing fields and fair competition. Baker B makes the affordable bread which can be enjoyed by the bus driver or heart surgeon - a baker for the masses, if you like.

Baker A makes bread for the more affluent.

Baker B is given zilch and told to get on it with, while Baker A is given a war chest of cash. It does not seem right.

whippet

jetsonx wrote: »

Even taking into account the other airlines are flag carriers, it seems unfair.

It's like two bakers. Both feed their local populations. A pandemic hits. Baker A is given a massive cheque by a third-party who continually preaches about level playing fields and fair competition. Baker B makes the affordable bread which can be enjoyed by the bus driver or heart surgeon - a baker for the masses, if you like.

Baker A makes bread for the more affluent.

Baker B is given zilch and told to get on it with, while Baker A is given a war chest of cash. It does not seem right.

to compare apples with apples you'd need factor in that Baker A would be required to make cabbage flavoured bread every day for the one lad up the road that liked it .. and would have to have his shop in the most expensive rental unit in the town with no option to rent a cheaper unit down the road beside Baker B

jmayo

martingriff wrote: »

You answered your own question. There the countries flag carriers. Ryanair are not. I doubt those counties are bailing out other non flag carrier companies. It's not just Ryanair. Ryanair will be fine with Michael O'Leary at the helm

Yeah but what is a flag carrier ?
All of these are mulitnational companies with shareholders.

Why should the shareholders of Lufthansa get a leg up, but any other German, Austrian and Swiss carriers not.
They are the second largest carrier in Europe so why should they get the German, Swiss and Austrian taxpayers to bail them out.
And yes they were looking for bailouts from all of those countries.

MOL was right they are likely a junkie looking for another fix.

martingriff wrote: »

You will be damn sure they be looking for there share (and I think rightly so) if Aer Lingus will receive something

Why should the Irish taxpayer give a fooking cent to Aer Lingus?
It is no longer in the ownership of Ireland, it is part of IAG so let the Brits and Spanish bail them out.

whippet wrote: »

as a réponse to the actual title of the thread


I'd ask how would anyone think that getting rid of Ryanair would be beneficial to the EU? - it is very much in the interest of the EU and it's bureaucrats to have cheap, frequent and reliable transport for millions of EU citizens across the continent.

So, in response No; the EU isn't actively trying to kill off Ryanair.

On the other hand they are allowing individual state to ensure as best they can the flag carriers who would provide the uneconomic routes that they likes of Ryanair wouldn't touch with a barge pole.

When MoL agrees to operate flights on routes and times that are not economical I'd suggest he might have more of a chance of getting a hand out

Where are all these uneconomic charitable routes you speak of ?

You rarely find any airlines continuing uneconomic routes for long.

Actually the whole thing stinks of the old "socialism for the big guys" that became common place for the banks during the financial bust.
If you are a small carrier then tough shyte, but if you are one of the big guys then you have to be saved by the taxpayers.

Funny how these big companies do anything to avoid paying taxes on their profits but are fooking quick to socialise their losses.

Fooking hell I am sounding more socialist than I have in decades.

And the EU turns a blind eye to state aid when it is one of the big states doing it.
The old two track EU where some are more equal than others.

jetsonx

jmayo wrote: »

Yeah but what is a flag carrier ?
All of these are mulitnational companies with shareholders.

Agree.

I've yet to see a convincing argument why this exceptionalism should be applied to "flag carriers". Sure, some of the serve unprofitable routes but not many.

martingriff

jmayo wrote: »

Yeah but what is a flag carrier ?
All of these are mulitnational companies with shareholders.

Why should the shareholders of Lufthansa get a leg up, but any other German, Austrian and Swiss carriers not.
They are the second largest carrier in Europe so why should they get the German, Swiss and Austrian taxpayers to bail them out.
And yes they were looking for bailouts from all of those countries.

MOL was right they are likely a junkie looking for another fix.



Why should the Irish taxpayer give a fooking cent to Aer Lingus?
It is no longer in the ownership of Ireland, it is part of IAG so let the Brits and Spanish bail them out.




Where are all these uneconomic charitable routes you speak of ?

You rarely find any airlines continuing uneconomic routes for long.

Actually the whole thing stinks of the old "socialism for the big guys" that became common place for the banks during the financial bust.
If you are a small carrier then tough shyte, but if you are one of the big guys then you have to be saved by the taxpayers.

Funny how these big companies do anything to avoid paying taxes on their profits but are fooking quick to socialise their losses.

Fooking hell I am sounding more socialist than I have in decades.

And the EU turns a blind eye to state aid when it is one of the big states doing it.
The old two track EU where some are more equal than others.

Ill answer the 2 questions you asked me the same they are considered the national carrier of the country. Ryanair is not but given he considers them Irish he be looking for some of the pie.

They are considering this probably because of the pandemic and doing an extraordinary measure. I am sure all other countries can do it if the EU have given it the green light.

fash

jetsonx wrote: »

In Germany, France and Italy – all of their so-called flag-carrier airlines are getting bailed out.

Air France-KLM - 10 Billion
Lufthansa - 9 Billion
Alitalia - 600 million + nationalised
Ryanair - 0

Say what you like about Ryanair but it has done more to open up Europe than any of these airlines. Ryanair has done more to integrate European citizens any directive from Brussels.

Yet, the bureaucrats in Brussels, the people who are meant to espouse fair competition, now seem intent on using this pandemic to kill off Ryanair.

What do you think?

As others on this thread have already indicated, if you want Ryanair to be bailed out, you should be lobbying the Irish government -and not the EU- to do so. Be prepared to deal with some ire from those without houses or hospitals however.

RunningFlyer

jetsonx wrote: »

In Germany, France and Italy – all of their so-called flag-carrier airlines are getting bailed out.

Air France-KLM - 10 Billion
Lufthansa - 9 Billion
Alitalia - 600 million + nationalised
Ryanair - 0

Say what you like about Ryanair but it has done more to open up Europe than any of these airlines. Ryanair has done more to integrate European citizens any directive from Brussels.

Yet, the bureaucrats in Brussels, the people who are meant to espouse fair competition, now seem intent on using this pandemic to kill off Ryanair.

What do you think?

Don’t forget that Ryanair have accessed a £600m loan from the UK government’s scheme so whilst they’re not obtaining a bailout per-se, they are accessing cheap credit from a foreign government even as an Irish airline.

https://www.theguardian.com/business/nils-pratley-on-finance/2020/may/18/refunds-rather-than-insults-would-serve-ryanair-boss-well-coronavirus

jmayo

martingriff wrote: »

Ill answer the 2 questions you asked me the same they are considered the national carrier of the country. Ryanair is not but given he considers them Irish he be looking for some of the pie.

They are considering this probably because of the pandemic and doing an extraordinary measure. I am sure all other countries can do it if the EU have given it the green light.

Ehh when has MOL looked for bailout ???

And yes I know the Germans will probably end up bailing out other huge companies, all of course in the "national interest" or as flag carriers in their respective industries.
Tough shyte if you are smaller and not as well connected so to speak.

fash wrote: »

As others on this thread have already indicated, if you want Ryanair to be bailed out, you should be lobbying the Irish government -and not the EU- to do so. Be prepared to deal with some ire from those without houses or hospitals however.

Who in this thread has ever claimed that Ryan Air should get a bailout ?

We just see as unfair that they have to compete against companies that are now being bank rolled by other states, which ultimately is normally seen as unfair competition according to EU rules.
And yes I know we don't live in normal times, yada yada yada.

RunningFlyer wrote: »

Don’t forget that Ryanair have accessed a £600m loan from the UK government’s scheme so whilst they’re not obtaining a bailout per-se, they are accessing cheap credit from a foreign government even as an Irish airline.

https://www.theguardian.com/business/nils-pratley-on-finance/2020/may/18/refunds-rather-than-insults-would-serve-ryanair-boss-well-coronavirus

Ehh you do know the difference between a bailout and a loan?

And £600million versus €10 billion is a bit different as well for most of us.

Unless of course you view differences differently when it comes to certain companies. :rolleyes:


A huge proportion of Uk traffic is Ryan Air.
Stansted would close without Ryan Air.
As of 2018 Ryan Air accounted for 70% of the seats flying out of Stansted.
Now since then they have added some other carriers during summer months that may have lessened a little, but the airport is Ryan Air.

I bet there are a fair few around these parts that are only too clad to see Ryan Air and MOL get a kicking, but just remember which ones are linked to Ireland and which ones couldn't give two shytes if it cost a months salary to get off this rock.

Plumbthedepths

I can see RA launching many illegal state aid cases in the near future.

Harry Palmr

Ryanair have 4 billion sat in the bank, they can wait for their bail out if that's what they are after. As for the rest of them, if governments are allowed to throw money in exceptional circumstances then let them.

jmayo

Plumbthedepths wrote: »

I can see RA launching many illegal state aid cases in the near future.

I can in the future see it being thrown out when MOL is arguing about some little airport offering a deal to Ryan Air and how the big players are trying to force the state authorities to clamp down on it.

The real interesting one is whether the Brits blink and give tax exile Branson a leg up.

I can't see it being popular in Britain if the former very anti bailout Branson gets one and continues to live the high life in the Caribbean.

jd1983

martingriff wrote: »

You answered your own question. There the countries flag carriers. Ryanair are not. I doubt those counties are bailing out other non flag carrier companies. It's not just Ryanair. Ryanair will be fine with Michael O'Leary at the helm

It's not just flag carriers who were bailed out. For example Condor was bailed out by the German government.
France allowed French airlines to not pay airport taxes but didn't give the likes of Ryanair the same advantage.

fash

jmayo wrote: »

Who in this thread has ever claimed that Ryan Air should get a bailout ?

is there any other interpretation possible of the OP?

scoobydude

whippet wrote: »

to compare apples with apples you'd need factor in that Baker A would be required to make cabbage flavoured bread every day for the one lad up the road that liked it .. and would have to have his shop in the most expensive rental unit in the town with no option to rent a cheaper unit down the road beside Baker B

I know analogies aren't always perfect, but are aer Lingus obliged to fly the routes they do? I could be wrong (probably am), but you would be right if the the case above was a bus route. But aer Lingus, lefthansa, etc don't fly routes at a loss out of a requirement to provide service do they?

Not having a pop, I'm genuinely curious.

CrankyHaus

scoobydude wrote: »

I know analogies aren't always perfect, but are aer Lingus obliged to fly the routes they do? I could be wrong (probably am), but you would be right if the the case above was a bus route. But aer Lingus, lefthansa, etc don't fly routes at a loss out of a requirement to provide service do they?

Not having a pop, I'm genuinely curious.

The only thing that comes close is the commitment to not sell it's 23 Heathrow slots without Irish Government approval.

This "legally binding" agreement was part of the sale of the state's 25.1% of the airline to IAG in 2015. So far there has been zero incentive to sell but in the long run I'm not convinced the agreement is remotely robust.

In fairness, with Willie Walsh at the helm, IAG has funnelled money to Aer Lingus at a preferential rate. However this was a business decision. In terms of ownership Aer Lingus is now more a British, Spanish or Qatari Airline than an Irish one.

fly_agaric

jmayo wrote: »

We just see as unfair that they have to compete against companies that are now being bank rolled by other states, which ultimately is normally seen as unfair competition according to EU rules.

I think alot of the EU anti state aid stuff (driven as I remember by our own Charlie McCreevy [?]) is going to be consigned to the dustbin as nonsense.
It was already stupid before the pandemic in a world with the likes of Brexit, Trump & Xi (UK/America/China First).

CrankyHaus

fly_agaric wrote: »

I think alot of the EU anti state aid stuff (driven as I remember by our own Charlie McCreevy [?]) is going to be consigned to the dustbin as nonsense.
It was already stupid before the pandemic in a world with the likes of Brexit, Trump & Xi (UK/America/China First).

Its primary purpose was to create a competitive trading environment within the EU; state-aid that may give an EU company an advantage over competitors in China, the US, or the UK when it leaves aren't really its target.

fly_agaric

CrankyHaus wrote: »

Its primary purpose was to create a competitive trading environment within the EU; state-aid that may give an EU company an advantage over competitors in China, the US, or the UK when it leaves aren't really its target.

No expert on when exactly state aid under EU rules is allowed, but seems to me if you cannot support & favour your companies while China, US, UK and others nakedly do so, you will you have a hand tied behind your back.

e.g. a country refuses to support company that was profitable prior to pandemic due to "EU state aid rules", while Chinese/US companies fully backed up by their states [or in case of China effectively controlled by the state] can come in and buy it/asset strip it (unless there are other EU/state market interventions completely against the whole spirit of "state aid rules" to stop them doing that).

CrankyHaus

fly_agaric wrote: »

No expert on when exactly state aid under EU rules is allowed, but seems to me if you cannot support & favour your companies while China, US, UK and others nakedly do so, you will you have a hand tied behind your back.

e.g. a country refuses to support company that was profitable prior to pandemic due to "EU state aid rules", while Chinese/US companies fully backed up by their states [or in case of China effectively controlled by the state] can come in and buy it/asset strip it (unless there are other EU/state market interventions completely against the whole spirit of "state aid rules" to stop them doing that).

Fair point. Actually a few days ago a 12 month ban on China buying up European companies was proposed by Manfred Weber, head of the EPP grouping in the EU Parliament.


Examples of companies facing this problem include, as reported today, Norwegian Air.
https://www.forbes.com/sites/davidnikel/2020/05/20/china-takes-stake-in-new-look-norwegian-air/

GocRh

fly_agaric wrote: »

No expert on when exactly state aid under EU rules is allowed, but seems to me if you cannot support & favour your companies while China, US, UK and others nakedly do so, you will you have a hand tied behind your back.

e.g. a country refuses to support company that was profitable prior to pandemic due to "EU state aid rules", while Chinese/US companies fully backed up by their states [or in case of China effectively controlled by the state] can come in and buy it/asset strip it (unless there are other EU/state market interventions completely against the whole spirit of "state aid rules" to stop them doing that).

Not an expert either, but I think that as long as the state support is available to any company in the state - level playing field - then from an EU perspective nothing is illegal. That was the basis for the EU decision that Apple had to return taxes to the State - the conditions Revenue offered to Apple were not available to other companies doing business in Ireland.


The US / China etc can still take the EU company to the WTO as was the case with Airbus.