Is the EU trying to kill-off Ryanair?

jmayo

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.

I think that is a crock of shyte to try make it sound as if the "flag carriers" are some sort of social service flying uneconomic routes and so deserving of state aid.
And yes it amounts to the analogy that Bus Eireann are running a route with a few old pensioners use to get in town to draw the pension.
To these posters Aer Lingus would have been always considered the flag carrier in Ireland, the same Aer Lingus that pulled it's Shannon to Heathrow routes.

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).

But this isn't about really competing against the US or China.
And that is effectively done already when you look at for instance Airbus.
It is being done so that the big states big airlines are given war chests.

And isn't a bit rich that these same states, and the EU they control, whine about Irish preferential tax deals when they are doing preferential deals themselves.
Bunch of fooking hypocrites.

fly_agaric

jmayo wrote: »

But this isn't about really competing against the US or China.
And that is effectively done already when you look at for instance Airbus.
It is being done so that the big states big airlines are given war chests.

And isn't a bit rich that these same states, and the EU they control, whine about Irish preferential tax deals when they are doing preferential deals themselves.
Bunch of fooking hypocrites.

No, you are right (about airlines specifically).

Still would not be great (for any of us) IMO if all these airlines are crippled due to the pandemic + for example US govt. supports its own to tide them over the period and they proceed to buy them + their remaining assets up for a song or take all their market share afterwards.

Our "preferential deal" (if appeal comes out against us) was with a non Irish company, not even an EU company at that. It is generally US technology companies that Ireland bends over backwards for.

On the airlines we sold our "flag carrier" of course, just like we sell out alot of things here if a fat enough wallet is dangled. Which is our perogative of course. Not being so short sighted does not make others hypocrites.

As for the "the EU they control" (presume "they" here is the perfidious Germans or the like) we are also members.

jetsonx

jmayo wrote: »

I think that is a crock of shyte to try make it sound as if the "flag carriers" are some sort of social service flying uneconomic routes and so deserving of state aid.
And yes it amounts to the analogy that Bus Eireann are running a route with a few old pensioners use to get in town to draw the pension.
To these posters Aer Lingus would have been always considered the flag carrier in Ireland, the same Aer Lingus that pulled it's Shannon to Heathrow routes.

This is the crux of the issue.

And I am surprised that so many posters on this thread believe that just because some airlines have "flag carrier" status, they are entitled to shed loads of free cash. If anything, Ryanair with their diverse route and flight frequencies, provide a better public service than any flag carrier.

For those who think that airlines with "flag carrier" status makes it acceptable for them to get "fee money" while their private competitors are thrown to the wolves. I'd like to know your thinking?

jmayo

fly_agaric wrote: »

No, you are right (about airlines specifically).

Still would not be great (for any of us) IMO if all these airlines are crippled due to the pandemic + for example US govt. supports its own to tide them over the period and they proceed to buy them + their remaining assets up for a song or take all their market share afterwards.

I think MOL is right when he makes the remarks about Lufthansa.
They are second biggest airline in Europe and by revenue they are 3rd biggest in the world.
They are already using state supports for staff, but have the hand out to get money from German taxpayers, Austrian, Belgian and Swiss taxpayers.

They have 4 billion in cash reserves and want another at least 9 billion.
They claim they are burning through 800 million a month.
As of Jan 2020 they had a profit of over 2 billion.

On the other hand Ryan Air have 4.1 billion and are burning through 60 million a week, that is 240 million a month.

My gripe is that it looks like Lufthansa are trying to create a war chest not just stay in business.

fly_agaric wrote: »

Our "preferential deal" (if appeal comes out against us) was with a non Irish company, not even an EU company at that. It is generally US technology companies that Ireland bends over backwards for.

Ah so it is ok if it is a European company or maybe it is just ok if it is a German, French or Italian company. :rolleyes:

fly_agaric wrote: »

On the airlines we sold our "flag carrier" of course, just like we sell out alot of things here if a fat enough wallet is dangled. Which is our perogative of course. Not being so short sighted does not make others hypocrites.

But so have lots of smaller nations.
You do know what happened to national flag carriers of Belgium, Austria, Switzerland ?
They are now all owned by none other than Lufthansa.

It is a damn good thing they didn't buy Aer Lingus or the fookers would be looking for a bailout from us.

fly_agaric wrote: »

As for the "the EU they control" (presume "they" here is the perfidious Germans or the like) we are also members.

Come on there has always been and always will be a two track EU when it suits the big guys.
Smaller countries have to obey rules that the big players like Germany, France and Italy are allowed bend when it suits.
Claiming otherwise he is naive in the extreme.

fly_agaric

jmayo wrote: »

Ah so it is ok if it is a European company or maybe it is just ok if it is a German, French or Italian company. :rolleyes:

Yes, it is much better if it is an EU company than a non EU one.
Don't know what the eye rolling is for?

jmayo wrote: »

But so have lots of smaller nations.
You do know what happened to national flag carriers of Belgium, Austria, Switzerland ?
They are now all owned by none other than Lufthansa.

Okay thanks for informing me. I suppose there's no problem there then? They will be (indirectly) bailed out. We do have some unfortunate geographical differences from those countries you mention that might have made us more cautious about destiny of the former "flag carrier".

jmayo wrote: »

Come on there has always been and always will be a two track EU when it suits the big guys.

I dunno. We seem to have done quite well out of our membership.
Have you some examples of Ireland being treated unfairly/the two speed in operation? (MOL/Ryanair != Ireland)

MrMusician18

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 I think? Well from your own language I think we can see where your own biases lie.

fly_agaric

Re Chinese state buying into European airlines saw this today:

https://www.ft.com/content/30fd6961-8664-47b9-a1fb-e7894e59e8b4

Two of the world’s largest aircraft leasing companies — including one controlled indirectly by the Chinese state — have become the biggest shareholders in Norwegian Air Shuttle as the embattled low-cost airline sealed its government-backed rescue.

fly_agaric

CrankyHaus wrote: »

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/

Was skimming the thread/not concentrating fully and I completely missed this reply (sorry) + went on to post same thing (re Norwegian Air) myself.

Not sure what direct benefit there is to the Chinese in such acquisitions/investments (as opposed to buying likes of Kuka Robotics, or European car makers etc.) but I suppose its just about building influence & control over time with a deep web of investments across all sectors of economies of all European countries (even if some of these turn out to be a waste of money).

On an EU level effort to stop it, I'm somewhat pessimistic anything will happen there.
The Chinese may have already bought enough influence with EU countries to stymie it.
Not much Chinese money/investment would be needed to swing some leaders in the more euro-sceptic countries (e.g. Poland, Hungary, Czech Republic) anyway.
They might obstruct such efforts just for the hell of it/create some trouble for "the big boys" (as they are called on this thread) with more companies to worry about that would be the plum targets of China.

CrankyHaus

fly_agaric wrote: »

Was skimming the thread/not concentrating fully and I completely missed this reply (sorry) + went on to post same thing (re Norwegian Air) myself.

Not sure what direct benefit there is to the Chinese in such acquisitions/investments (as opposed to buying likes of Kuka Robotics, or European car makers etc.) but I suppose its just about building influence & control over time with a deep web of investments across all sectors of economies of all European countries (even if some of these turn out to be a waste of money).

On an EU level effort to stop it, I'm somewhat pessimistic anything will happen there.
The Chinese may have already bought enough influence with EU countries to stymie it.
Not much Chinese money/investment would be needed to swing some leaders in the more euro-sceptic countries (e.g. Poland, Hungary, Czech Republic) anyway.
They might obstruct such efforts just for the hell of it/create some trouble for "the big boys" (as they are called on this thread) with more companies to worry about that would be the plum targets of China.

No worries mate.


In the short term the companies are relatively cheap due to market sentiment so state-backed Chinese companies can purchase them, or significant/dominating chunks of them, on the cheap.


In the longer-term there could be any number of reasons, many legitimate.
However there is a broader theme of China, or Chinese companies with ties to the state, buying up strategic infrastructure in other countries, or making loans secured against it that may default.


Naturally this gives China significant influence over other countries.
It's hard to talk about this without coming off like a US Hawk, or even a Trumper, but the pattern is very real.


One serious concern the Chinese have is containment of China within the First Island Chain, dominated by potentially hostile powers. It is heavily reliant on shipping through the chain to import the resources it needs and export the goods it needs to sell.


The Belt and Road initiative is in part an attempt to address this, with a heavy emphasis on infrastructure projects with over 130 countries.



In addition China has been trying to build influence with Europe for some years. This FT article on the Panda Diplomacy aspect of it is informative:


https://www.ft.com/content/8a04a532-be92-11e7-9836-b25f8adaa111


However this year China's love-bombing of Europe is starting to come a little unstuck.
Heavy handed treatment of countries like Sweden and Netherlands over what should have been minor diplomatic spats backfired; as did pressure over how European countries should treat the Hong Kong protests.
https://www.politico.eu/article/sweden-china-diplomatic-spat/

https://www.politico.eu/article/coronavirus-cartoon-triggers-china-denmark-diplomatic-spat/



Coronavirus hurt China's image.

The subsequent PPE supply PR operation was counterproductive due to quality issues.

Now you have national governments dabbling in closer ties with Taiwan and comments like the call to prohibit Chinese purchases of European companies from the head of the EPP that would have been dismissed as Wingnut Anti-China Rhetoric 12 months ago.


China itself is becoming more bellicose in response.



https://www.irishtimes.com/news/world/asia-pacific/braced-for-battle-china-s-wolf-warrior-diplomacy-goes-global-1.4244084
https://foreignpolicy.com/2020/04/29/beijing-china-doubles-down-diplomatic-aggression-coronavirus-pandemic/



It's impossible to make any sure bets but we may have reached the high water mark of Chinese influence in Europe.

landofthetree

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?

To be fair the EU did a lot to open up the airline business. They basically did what the Yanks did.

But it does seem unfair that this time Ryanair has to compete with companies given state aid.

https://www.europarl.europa.eu/factsheets/en/sheet/131/air-transport-market-rules
The same occurred in Europe in a decade-long process, in the wake of the Single European Act of 1986 and the completion of the internal market: several sets of EU regulatory measures have gradually turned protected national aviation markets into a competitive single market for air transport (de facto, aviation has become the first mode of transport — and to a large extent still the only one — to benefit from a fully integrated single market). Notably, the first (1987) and the second (1990) ‘packages’ started to relax the rules governing fares and capacities. In 1992, the ‘third package’ (namely Council Regulations (EEC) Nos 2407/92, 2408/92 and 2409/92, now replaced by Regulation (EC) No 1008/2008 of the European Parliament and of the Council) removed all remaining commercial restrictions for European airlines operating within the EU, thus setting up the ‘European Single Aviation Market’. The latter was subsequently extended to Norway, Iceland and Switzerland. It could be further extended to some neighbouring countries through the ‘European Common Aviation Area Agreement’, provided those countries progressively implement all relevant EU rules — which is not yet the case[1].