Ryanair sues over French airlines rescue package as it fights virus bailouts

RYANAIR has challenged French government help for Air France-KLM, in its latest legal attack on allegedly unfair government support for favoured national carriers amid the Covid-19 crisis.

The Irish airline said yesterday that it has filed a lawsuit at the European Union’s General Court seeking to topple the EU’s approval for a programme delaying aviation tax payments for companies with a French licence.

The tax break will mostly benefit Air France and excludes Ryanair and easyJet, which fly many routes from French airports but are based elsewhere.

Ryanair has also complained that similar Swedish and Danish programmes unfairly discriminate against other European carriers.

European governments are planning to pump billions of euro into airlines after the coronavirus outbreak halted most air travel.

These subsidies for Air France, Alitalia and Deutsche Lufthansa are “going to hugely distort the level playing field for aviation” by keeping inefficient airlines alive while rivals like Ryanair risk burning through cash reserves, Ryanair CEO Michael O’Leary said earlier this month.

The European Commission, the EU’s executive arm, said it would defend its decision in court.

A spokeswoman for Air France-KLM declined to comment.

French government officials also had no immediate comment.

Air France-KLM CEO Ben Smith said last week that government aid including billions in loans and guarantees as well as payroll support and tax measures are essential to the carrier’s survival.

France will allow French airlines to defer some €200m in aviation tax payments due from March and December this year, according to the European Commission.

They won’t need to pay it until the end of 2022 and France estimates that it could cost the airlines some €29.9m to obtain the same funding on the market.