CEO of Ryanair hits out at Air Berlin-Lufthansa deal

Ryanair sees any plans by Lufthansa to take over parts of insolvent rival Air Berlin as a conspiracy to halt the Irish carrier’s expansion, its chief executive told Reporter. Air Berlin has filed for insolvency after shareholder Etihad said it would not provide more funding, turning to the German government for a Euros 150mn ($176mn) loan to keep planes in the air while it negotiates a sale of parts of its business to Lufthansa and one other airline. Ryanair has already filed a complaint with German and European Union competition authorities over the insolvency process, which it describes as a conspiracy because it believes that Lufthansa will gain a bigger share of the German market. All this is down to prevent Ryanair growing in Germany, but it won’t stop us, Michael O’Leary told Reporter in a telephone interview. Germany has rejected Ryanair’s claims. A German economy ministry spokeswoman said a bridging loan of Euros 150mn ($175.5mn) the government had granted Air Berlin did not breach anti-trust rules. I reject the accusation by Ryanair today that it was a staged insolvency application, the spokeswoman said. A spokesman for Lufthansa declined to comment on the Ryanair accusations. Germany faces allegations of maintaining a cosy relationship with its domestic industry and questions about whether authorities did enough to uncover an emissions scandal at car maker Volkswagen, which is partially state-owned. Air Berlin said it had sounded out the German states of North-Rhine Westphalia and Berlin in June to see whether they would provide loan guarantees after Etihad signalled it was rethinking its strategy of holding minority investments in smaller carriers. The German economy ministry spokeswoman said that negotiations between Lufthansa and Air Berlin had been going on for months as executives sought a long-term solution for the airline. The German government said it expected no anti-trust issues because Air Berlin would be sold off in bits. But O’Leary is not convinced his airline is being given a fair chance. A merger will take Lufthansa from 68% to 95% of the German domestic market and from 47% to 60% control of the total German market, which would be in breach of every known competition threshold rule and guideline in Germany and the EU, O’Leary said. He said Alitalia’s insolvency was being done on a fairer basis, with rival airlines being invited to submit offers.

Source: Civil Aviation Authority, Qatar

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