Friday 26 June 2020 1:02 pm

Ryanair boss Michael O'Leary calls on EU to block KLM bailout

Ryanair boss Michael O’Leary has called on the European Union to block a €3.4bn (£3.1bn) rescue package for the Dutch wing of Air France-KLM.

In a statement, O’Leary said: “We call on the European Commission to block this subsidy doping to KLM, which will further reduce competition and consumer choice in the Dutch and French markets”.

Read more: British Airways, Ryanair and Easyjet launch quarantine legal action

He added that the deal was bad for competition, saying that it delay “necessary” reforms of the Franco-Dutch group.

His comments come just a day after he slammed the EU for approving Lufthansa’s €9bn bailout deal from the German state on similar grounds.

“In clear breach of European competition rules, Berlin is wasting vast amounts of taxpayers’ money to prop up an uncompetitive airline that should be putting its own house in order instead of once again running to the Government for help”, he said.  

“This and other bailouts will have a more devastating long-term effect on the future of European aviation than the pandemic itself”.

Under the deal, which was approved by 98 per cent of Lufthana’s shareholders at a meeting yesterday, German authorities will take a 20 per cent equity state in the flag carrier.

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He called it a “betrayal” of EU law and said Ryanair would be forced to take the case to court.

O’Leary has been a long-term opponent of state aid, and has consistently railed against governments stepping in to prop up struggling carriers.

Back in January he threatened to sue the UK government if it chose to prop up struggling regional carrier Flybe, which eventually went bust in March.

Many had expected the sector to see a spate of collapses due to the onset of the coronavirus pandemic, which has hammered airlines around the world.

However, governments have stepped in on a number of occasions to protect airlines with both sector specific and bespoke arrangements.

The UK is one of few authorities not to take such steps, although it has frequently reiterated that airlines will be able to claim such support once they had exhausted all other means of raising funding.

Read more: Shareholders back German government bailout to rescue Lufthansa

The UK’s largest carriers, Ryanair, BA, Easyjet and Wizz Air have all drawn down funds with a combined worth of £1.8bn from the Bank of England’s Covid Corporate Financing Facility.

They have also made use of the government’s furlough scheme.