Ryanair Holdings filed a lawsuit at the European Union's General Court on May 11 to challenge the French government's support for Air France-KLM and other French airlines, according to a report on Bloomberg. The ultra-low-cost carrier (ULCC) is seeking to overturn the EU's approval for a programme giving considerable aviation tax refunds "only to French airlines."
The programme will see the French government allowing "French" airlines to defer around EUR200 million euro (USD217 million) in aviation tax payments due from March until December this year until the end of 2022. The Irish airline believes that the tax break will mostly benefit Air France (AF, Paris CDG) but "all other EU airlines flying in France (such as Ryanair, easyJet, and British Airways) must still pay these taxes. This bailout discrimination is clearly in breach of state aid and competition rules." Ryanair has also complained that similar Swedish and Danish programmes unfairly discriminate against other European carriers.
The European Commission has already approved, under relaxed EU state aid rules, a EUR7 billion euro (USD7.64 billion) French guarantee and shareholder loan for Air France to ensure it has enough liquidity to survive the global crisis.
Ryanair is coming good on its plans to challenge the current round of state aid or "doping for flag carriers" in the European Courts, which the airline announced it would pursue in its market update on May 1. It said, "the level playing field will be distorted by competing against legacy airlines who are receiving over EUR30 billion euro [USD32.4 billion] of state aid, in clear breach of both EU competition and state aid rules." The airline suggests that EU governments should cut passenger, airport and departure taxes on an industry-wide basis instead.
The ULCC said that the planned state aid of EUR30 billion euro (USD32.4 billion) in addition to payroll support would "fund many years of below cost selling" by the likes of Air France-KLM, Lufthansa Group, and Alitalia (AZA, Rome Fiumicino). By comparison, it had "done so much to lower fares for consumers over the last 20 years."
