Transport Airlines

EU rules against Ryanair in complaint against illegal Alitalia loan

Jun 16, 2013 6:58 am

Skift Take

Ryanair is always on the lookout for shady practices by national carriers and the governments that keep them around. But even though the low-cost carrier has made a lot of noise over the years, the playing field isn’t nearly as level as it would like to to be.

— Jason Clampet

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Mohamed Abd El Ghany  / Reuters

An Alitalia airplane is seen at the airport in Cairo. Mohamed Abd El Ghany / Reuters

Ryanair Holdings Plc lost a challenge at the European Union’s top court that may have forced Alitalia SpA’s owners to repay a 300 million-euro ($400 million) loan from the Italian government.

The EU Court of Justice in Luxembourg today rejected “all of the arguments raised by Ryanair” and upheld the EU decision that while the Italian loan to Alitalia was illegal, a sale of assets by the company’s former owners related to the loan was fully in line with EU law.

The EU General Court, the bloc’s second-highest tribunal, last year rejected Dublin-based Ryanair’s first challenge of the decision which approved the sale of Alitalia’s main assets to Compagnia Aerea Italiana, a group of Italian investors, after the airline’s 2008 bankruptcy.

The Brussels-based commission previously said that new investors aren’t responsible for paying back illegal state aid as long as they purchase the assets at market price.

Alitalia’s loss widened to 280 million euros last year from 69 million euros in 2011, though it reached break-even in the fourth quarter.

Alitalia’s “financial positioning shows that it has failed to adapt to the realities of the liberalized market,” Robin Kiely, Ryanair’s head of communications, said by e-mail.

Ryanair partly won a court challenge in 2011 over the commission’s handling of complaints by the company against alleged unlawful state aid by Italy to a number of competitors including Alitalia. Ryanair has also sued regulators for failing to investigate government aid to Alitalia.

The case is: C-287/12 P, Ryanair v. Commission.

Editors: Peter Chapman, Andrew Clapham. To contact the reporter on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net. To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net. 

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