Ryanair: Consumers will benefit if Air Europa leaves the market.

Ryanair is preparing legal action against airline rescues in the European Union (EU) and believes that Spanish consumers “would benefit if Air Europa were to leave the market,” said the low-cost company’s legal director, Juliusz Komorek, in an interview with Efe.

The airline will assess going to court, in Madrid or Brussels, if Air Europa has access to the fund to support strategic companies that the Spanish government has provided 10,000 million euros, and ensures that it has already prepared at least six other claims against rescues in EU countries.

Air Europa, with whom the IAG group is in talks for a possible purchase, has not yet made any statement on its plans to go to the rescue plan or not.

The case of the Spanish airline is “somewhat different” from that of aid to other continental firms, says Komorek, since it would be a loan within the framework of a program accessible to all industrial sectors.
According to the person in charge of legal affairs, Ryanair disagrees with the requirement that a company must be based in Spain in order to be eligible for the funds, which are managed by the Sociedad Estatal de Participaciones Industriales (SEPI).

“When I analyze it from the point of view of the principles of the European Union legislation, such as the non-discrimination and the freedom to provide services, I can understand the condition of having strategic importance, because we are talking about large amounts of money”, he stated.

“However, I do not understand the condition of national registration. It is inconsistent with the principles of Community law,” considered Komorek, who stressed that “Ryanair is clearly of strategic importance to Spain.

Questioned about the possibility that his company would opt for such aid if it met the requirements, he said that they would like to “have the option”.

“I can’t say today that we would ask for a loan, but it would be fair to have the option of applying for it if Ryanair needed to access capital. That we could use a program like that,” he said.

He also argued that in countries like the United Kingdom the company does have access to state funding plans for companies hit by the coronavirus pandemic and that granting funds to Air Europa under the premises of the government fund would “distort competition” in Spain.

“I think Spanish consumers would probably benefit if Air Europa left the market. I know that in the short term it doesn’t seem right, because a well-known brand disappears,” said Komorek.

“But consumers would benefit,” added the legal director of the Irish firm, who recalled the disappearance of Spanair in 2012.

“Spanair was a significant connectivity provider in Barcelona but, when it left the market, Barcelona suddenly became more attractive to more efficient airlines and the level of connectivity (in the city) has increased,” he said.

For Komorek, “the same thing would happen in Spain, both in terms of long distance and short distance connections,” if Air Europa disappeared.

Addressing the situation that Ryanair is going through as a result of the measures that countries have taken to try to prevent the spread of COVID-19, the company’s legal chief said that “several hundred jobs” have already been cut, mainly in the central office, in some of the ground activities, as well as “some pilot and crew positions”.

He assures that he hopes not to reach the 3,000 he advanced as a possibility in May, although he assures that “the process is not finished.

In Spain, the company signed an agreement with the pilots to reduce base salaries by 20% for four years in exchange for keeping the jobs, according to the Sepla union, but it continues to negotiate with the cabin crew.

“You don’t have to be an aviation expert to know that this year and next year are not going to be easy. (…) Everyone has to make sacrifices. We have made sacrifices here at the headquarters and the pilots have made sacrifices,” Komorek said.

Regarding his objectives in the negotiation with the Spanish cabin crew, he said that Ryanair hopes to obtain a pact similar to the one “agreed in most countries”, which includes “a 10% reduction in salary, recoverable in the next five years”.

By Guillermo Ximenis – EFE