Posted on: 13 July 2018 by Mark Thomas
The European Commission (EC) has formally approved Ryanair’s planned acquisition of LaudaMotion without conditions, with the Irish carrier immediately going on the offensive against Germany’s Lufthansa, accusing it of attempting to destabilise and damage the Austrian airline.
Lufthansa has totally refuted the claims by Ryanair, describing them as “false allegations.”
The EC concluded that the transaction would raise no competition concerns in the European Economic Area. LaudaMotion, run by former Formula One motor racing champion Niki Lauda, acquired the assets of the Austrian leisure carrier Niki earlier this year following the demise of Air Berlin. Ryanair then agreed in March to buy an initial 24.9% stake in LaudaMotion as it positioned itself for the German and Austrian markets, with that stake rising to 75% subject to EU regulator approval.
Ryanair, welcoming the EC’s decision to approve its proposed acquisition of the majority stake, said it had entered into partnership with Niki Lauda to offer competition, lower fares, and more choice for consumers in Austria, Germany, and Spain, where the majority of LaudaMotion services currently take place.
But it continued: “However, LaudaMotion is currently under threat by Lufthansa who are attempting to remove the nine aircraft Lufthansa was obliged by the European Commission to provide to LaudaMotion in order to allow LaudaMotion to restart services. This is the latest in a series of efforts by Lufthansa to destabilise and damage LaudaMotion.”
These efforts, it outlined, include:
– Lufthansa failing to deliver two of the 11 aircraft it was required to under the EU Competition decision concerning Lufthansa’s acquisition of Air Berlin.
– Some of the aircraft that Lufthansa had committed to deliver being delayed until after the summer 2018 season, further reducing LaudaMotion’s ability to take up slots and offer summer 2018 flights and services.
– LaudaMotion only able to operate a 19 aircraft fleet in summer 2018 by wet leasing 10 B737 aircraft from Ryanair.
– Lufthansa Group delaying payment of over €1.5 million of wet lease payments properly due to LaudaMotion, for flights which LaudaMotion operated for Lufthansa in March, April and May.
Ryanair says it “remains committed to bringing competition and choice to Austrian, German and Spanish markets through this investment in LaudaMotion,” and called on the competition authorities to “halt Lufthansa’s repeated abuses of its dominant position, which are designed to harm competition and consumers.”
Ryanair’s chief legal and regulatory officer, Juliusz Komorek, urged the EU competition authorities “to take action and prevent any further attempts by Lufthansa to damage competition through its anti-consumer behaviour.”
Lufthansa said in response that Ryanair’s allegations against it were “completely unfounded.”
“Lufthansa has fully complied with all EU Commission obligations regarding the required transfer of aircraft to LaudaMotion. This is true of both the number of aircraft involved and their leasing terms. All the aircraft covered by the EU derogation decision were offered for sale to Laudamotion by Lufthansa. Laudamotion rejected this offer, preferring to lease the aircraft instead,” the Lufthansa statement claimed.
“LaudaMotion has recently failed – repeatedly – to meet its contractually-agreed lease payment obligations. As the Eurowings Group needs aircraft, Lufthansa has exercised its contractually agreed right of termination because of a violation of contractual terms by Laudamotion, and has terminated the lease agreements on nine aircraft due to the non-payment of the lease amounts involved,” the statement concluded.
Written by: Mark Thomas
If you have any feedback about this article or would like to suggest a topic for future investigation, please contact us.