RyanAir accuses competitors in Europe of trying to strip its license
The European Network Airlines Association, which includes Lufthansa and Air France-KLM, has been calling on EU and Irish aviation authorities for months to check RyanAir’s compliance with EU rules. Now she's suing
RyanAir, Europe's largest airline, has accused rivals Lufthansa and Air France-KLM of trying to suspend its flights and license. That's what Politico says.
Lufthansa and Air France-KLM are members of the European Network Airline Association (ENAA), a lobby group that has filed a lawsuit over Ryanair's shareholder ownership structure.
“They have now appealed to the High Court of Ireland seeking the suspension of our license and the termination of Ryanair’s flights,” said Ryanair CEO Michael O’Leary.
RyanAir is an Irish low-cost airline founded in 1984. It is part of the Ryanair Holdings Group, the largest airline group in Europe by number of passengers. The company operates mainly short flights in Europe and is known for a model of low basic fares with additional charges for a number of services.
The association itself has confirmed to Politico that it has been urging EU and Irish aviation authorities for months to check on RyanAir for compliance with the bloc's ownership and control rules. When the Irish Civil Aviation Authority (ENAA) showed “reluctance to intervene in this matter”, the case was referred to the court. At the same time, the company can lose its license only if it does not comply with the court decision.
According to the rules, in order to obtain a license, airlines must be in majority ownership and effectively controlled by EU citizens or entities. ENAA claims RyanAir no longer meets these requirements, citing its report that only 30% of the company’s shares are owned by EU citizens. At the same time, the CEO of the company owns 4% of the shares.
RyanAir denies the allegations, arguing that shareholders from non-EU countries do not have the right to vote, respectively, the airline is under the control of the EU. In a statement, the airline accused rivals of trying to "limit competition and choice for EU air travel.".
Director of the consulting company Alton Aviation Consultancy Augusto Viansson Ponte said it is unlikely to deprive the company of the license. At the same time, he doubted that the case would be easily overturned.
"The ENAA request is reasonable enough to warrant a review, but it is too early to say RyanAir is breaking the rules," he said.
The analyst also stressed that if the court ruled against RyanAir, the company could restrict the purchase of shares from outside the EU, facilitate the transfer of shares to investors from the EU, conduct targeted share buybacks or restructure its licensed subsidiaries, thereby avoiding revocation of the license.
