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Toinou
Posts: 277
Joined: Sun Apr 14, 2019 8:21 am

Re: Ryanair Threatens EU Over State Aid to Airlines

Sun Apr 26, 2020 1:49 pm

Blerg wrote:
As for the Greens, from what I know they still use the plane to go for holidays and so on. The moment fares would go up they would be faced with growing discontent at home.

I'm not sure you know lots of Green members or voters. I do, in Switzerland. Some use planes, some don't but almost all of then agree on the fact that air fares should be higher. What it would do to their electorate is show them that they act.
 
Blerg
Topic Author
Posts: 4064
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Re: Ryanair Threatens EU Over State Aid to Airlines

Sun Apr 26, 2020 1:49 pm

sabenapilot wrote:
Blerg wrote:
sabenapilot wrote:

Why should talks with different Austrian airlines be conducted all together by the government?
Different airlines have different business models, different needs and can likely also expect different conditions in return for state support: I doubt it's efficient to organize one single round table conference for all those.
The Austrian government has indeed engaged with Austrian Airlines; is there any refusal by the Austrian government documented to also sit down with others like Lauda and see if they can work out a specific agreement with them too? I haven't seen such a refusal! Have you? All there is is a silly demand to just automatically get a percentage of the sum Austrian will be getting, in return for basically nothing at all! Now that would be really bad governance by the government if it were to be awarded!


So what you are saying is that government plans for small businesses are bad because they are not sitting down with each one of them to make a plan that suits them the most?


Ideally yes, the government would have to tailor make each loan, but for a one-man limited or an SME this is sadly not possible; however, for multi-nationals it is and so it should be done to maximize the ROI. I'm sure you agee with me every government euro is to be spent as wisely as possible?

Allow me to point out something rather strange in your posts: one moment you're agry because conditions attached to the government loan for OS are not clear to you and do not seem to offer the creditor anything meaningful in your personal view, yet the very next moment -as a remedy- you want the same goverment to double down on this faulty principle by giving more money to another airline, with even less conditions attached to it (if any)? :scratchchin:

2 wrongs generally dont make a right if you truly believe in what you're preaching, unless the second one suddenly is in your own personal interest, of course... :sarcastic:

The conclusion is that for airlines there clearly is no automatism to public funding and rightfully so!
OS thus sat down with the government of Austria and they both hammered out a mutually satisfying tailor made deal.
If other airlines in Austria want to obtain similar help as OS, let them start by presenting a business case for such financial help to the government like OS did, rather than demand they can just piggy back on the business case of a competitor
If the case is there for them too, I'm sure the government will consider it with an open mind in return for certain commitments of common interests of course, yet it seems this is the biggest problem: Lauda (and Ryanair) seem not to be willing to commit to this very basic principle in return for public funds.
Don't expect any funding if you're not willing to at least try to be accomodating to some very valid demands.


First of all, I am not angry, I am quite indifferent as I don't have anything to do with Vienna, Austrian Airlines or Ryanair. I seem to have confused you, maybe I should have clearly pointed out where I am presenting my own views on the matter and where I am defending Ryanair's point of view while not necessarily agreeing with them.

As for OS sitting down with the government, that's where the government made the mistake. Once they sat with OS they should have reached out to others to offer them a meeting otherwise they are favoring one company over the rest. That's a big no no.

At the end of the day Lufthansa Group and the Austrian government need to face the reality that no matter how much money they throw at Austrian Airlines, they are still going to struggle and suffer once the crisis passes. Austrian Airlines' costs are simply to high in order to fight Wizz Air and Ryanair for the O&D market. They can match their €50 tickets but unlike the other two, they can't make money off of that.

Bottom line is that within six months are going to be discussing Austrian Airlines struggling to make ends meet as both W6 and Lauda keep on attacking them left and right. Europeans have voted with their wallets and they've chosen ULCCs are their airline of choice. Unfortunately this is something the Austrian government is refusing to understand. Austrian Airlines died the moment low cost carriers started expanding in Vienna. Why do you think LH threw such a hissy fit the moment FR announced FRA flights.
 
Blerg
Topic Author
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Re: Ryanair Threatens EU Over State Aid to Airlines

Sun Apr 26, 2020 1:50 pm

Toinou wrote:
Blerg wrote:
As for the Greens, from what I know they still use the plane to go for holidays and so on. The moment fares would go up they would be faced with growing discontent at home.

I'm not sure you know lots of Green members or voters. I do, in Switzerland. Some use planes, some don't but almost all of then agree on the fact that air fares should be higher. What it would do to their electorate is show them that they act.


I'm actually happy not to know a lot of Green voters, I generally dislike disillusioned hippies who are disproportionately attacking the aviation industry.
 
LJ
Posts: 5334
Joined: Wed Nov 17, 1999 8:28 pm

Re: Ryanair Threatens EU Over State Aid to Airlines

Sun Apr 26, 2020 2:15 pm

Blerg wrote:
Toinou wrote:
Blerg wrote:
As for the Greens, from what I know they still use the plane to go for holidays and so on. The moment fares would go up they would be faced with growing discontent at home.

I'm not sure you know lots of Green members or voters. I do, in Switzerland. Some use planes, some don't but almost all of then agree on the fact that air fares should be higher. What it would do to their electorate is show them that they act.


I'm actually happy not to know a lot of Green voters, I generally dislike disillusioned hippies who are disproportionately attacking the aviation industry.


Most Greens are very consistent in thier views. Anyway, higher fares is a necessity for a business where margins are not high enough to get a decent buffer (unless off course you squeeze every EUR out of your employees you can). Rynair will agree to this, hence why they don't want airlines like Austrian to receive state aid (it eats in their margin). If you're really concerend about low fares you should welcome the state aid. Or do you really believe that Ryanair will lower fares when it receives X million of EUR from any government?
 
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Ty134A
Posts: 533
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Re: Ryanair Threatens EU Over State Aid to Airlines

Sun Apr 26, 2020 2:40 pm

There are some aspects missing in this discussion. Austria is a bit different from the rest of the world when it comes to working contracts. There is a „partnership“ between unions and companies, basically they negotiate a working contract for every one working in this field (very simplified explained). These baseline contracts are binding for everybody working in this field, you can‘t pay below.

This Austrian tradition is holy to the people here, it ist Stalingrad for labour leftish parties. OS basically always attacked this kind of base contract since they became German, but never succeeded. Wizz only works with foreign staff here, which is why i recommend not flying with them, because this way they get around those baseline contracts. It is basically a Hungarian operation in Austria. And while Hungary alwasy is protective, why sould Austria welcome them here?

Then we have FR. They never bothered about these Austrian baseline contracts at all, blockt a union from forming in a way not acceptable to Austrian society. They suffer heavy from this publicity fail. MOL doesn‘t even understand what the concept behind all this is, therefore failing bigtime. Because of that, there is no support. MOL also doesn‘t understand the Austrian way of corruption, which is basically a political tie to every cent turned around in this country. He just doesn‘t get it, it is so funny... and he is making it even worse every day.

So, Austria will give OS money. Austria will not support a Hungarian airline exporting poverty into this country, and they will not support an airline with a very naive person insulting the Austrian culture and traditions over and over again, for no reason. Austria is in some aspects a bit different to the rest of the world.
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sabenapilot
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Re: Ryanair Threatens EU Over State Aid to Airlines

Sun Apr 26, 2020 3:35 pm

Blerg wrote:
As for OS sitting down with the government, that's where the government made the mistake. Once they sat with OS they should have reached out to others to offer them a meeting otherwise they are favoring one company over the rest. That's a big no no.


Again, you set some very strange expectations for a government of a free market economy!
It's really not up to any government to find out who is in need of any help and who isn't: private companies do know best what their needs are even in these unique times, I'd think?
MOL has a very simple choice to make, one he can make in all freedom: either make a formal request to negotiate financial aid from the government and accept there will likely be some unpleasant conditions attached to it, or not negotiate at all and obviously forgo any financial aid for his company. Seems like he did make his choice and I respect that.
What he can't do is refuse to even talk about those conditions, but still expect to get public money: free lunches are not on the menu, those times are gone.
Common sense, I'd say?
 
Blerg
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Re: Ryanair Threatens EU Over State Aid to Airlines

Sun Apr 26, 2020 3:50 pm

sabenapilot wrote:
Blerg wrote:
As for OS sitting down with the government, that's where the government made the mistake. Once they sat with OS they should have reached out to others to offer them a meeting otherwise they are favoring one company over the rest. That's a big no no.


Again, you set some very strange expectations for a government of a free market economy!
It's really not up to any government to find out who is in need of any help and who isn't: private companies do know best what their needs are even in these unique times, I'd think?
MOL has a very simple choice to make, one he can make in all freedom: either make a formal request to negotiate financial aid from the government and accept there will likely be some unpleasant conditions attached to it, or not negotiate at all and obviously forgo any financial aid for his company. Seems like he did make his choice and I respect that.
What he can't do is refuse to even talk about those conditions, but still expect to get public money: free lunches are not on the menu, those times are gone.
Common sense, I'd say?


Actually I expect a government in a free market economy not to provide aid to any private business, in this particular case Austrian Airlines. Ryanair shows that it can be done so what's the point of keeping a decaying business such as OS (a relic of the past that didn't adapt to modern times) in business.
 
blueflyer
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Re: Ryanair Threatens EU Over State Aid to Airlines

Sun Apr 26, 2020 4:03 pm

The airline that has worked so hard to pretend all their employees were based in Ireland to escape local employment taxes now wants help from the countries it refused to pay up to. How rich...

I think governments should offer loans to airlines payable against all future profits before inter-company transfers, dividends, executive bonuses, etc. Interests should be the social charges the airlines would have had to pay over the past ten years, with credit for charges actually paid...
 
3AWM
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Re: Ryanair Threatens EU Over State Aid to Airlines

Sun Apr 26, 2020 4:24 pm

MOL has to be right that these bailouts are illegal subsidies.

Arguments that about whether a carrier is a "flag" carrier, where it is registered, whether it is deemed to be a "good citizen" or even if it has broken the same rules itself in the past will not have any legal precedent.
 
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oxonrow
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Re: Ryanair Threatens EU Over State Aid to Airlines

Sun Apr 26, 2020 5:45 pm

Why are so many of you so down on FR? A late entrant onto the market that managed to shake things up. Yes, we should weed out unfair practices, but the way the law is laid out the airline does bring connectivity to places that didn't have it before or had no competition. Legacy carriers do not benefit from indirect subsidies? Can anyone seriously argue that? We have a major problem in this industry in Europe, where our petty nationalisms get in a way and make for a highly imperfect market. The likes of FR actually do tremendously well transcending this obstacle and we're all better for it as consumers. Next step is the environment, a serious issue to address, but let's move this discussion up a notch.
 
LJ
Posts: 5334
Joined: Wed Nov 17, 1999 8:28 pm

Re: Ryanair Threatens EU Over State Aid to Airlines

Sun Apr 26, 2020 6:31 pm

3AWM wrote:
MOL has to be right that these bailouts are illegal subsidies.


The EU has always allowed state aid in the form of a loan, which is on "commercial" rates in some circumstances (see Alitalia). To say that these are "illegal" subsidies one needs to know how the loans are constructed. Moreover, given the money available to help companies hit by this crisis, it will be difficult to argue that the loans are "illegal" (if structured correctly).

Blerg wrote:
Actually I expect a government in a free market economy not to provide aid to any private business, in this particular case Austrian Airlines


Which solves this discussion as a "free market economy" as you see it does not exist anywhere in the world.
 
NYCVIE
Posts: 284
Joined: Mon Jul 04, 2016 11:01 pm

Re: Ryanair Threatens EU Over State Aid to Airlines

Sun Apr 26, 2020 6:49 pm

Waterbomber2 wrote:
Austrian Airlines for instance has no domestic flights, so all their flights are from Austria to another country.

This is not true. They fly up to fifteen domestic flights a day. Innsbruck, Salzburg, Graz, and Klagenfurt.

Waterbomber2 wrote:
So if the Austrian government helps OS, they can't reject requests from other airlines who are competing against OS.

As has been stated, no aid has been rejected as FR hasn't even formally requested it.

Blerg wrote:
I am sorry but how exactly is Austrian Airlines essential? Most of their routes have competition meaning that even if they were to go away the market would not suffer. This by definition doesn't make them essential, especially since they are not even an Austrian owned company.

Lauda is more essential than Austrian Airlines simply because they have a healthier business model which doesn't require them to be continuously financed by someone else. Pretty simple. So what value does Austrian Airlines bring to Austria that others couldn't compensate? Especially now when they are about to shrink by 20 aircraft and when they will start firing their employees.


LOL this actually made me laugh. Lauda employs around 1/8 the number of people OS employs to start. OS is the only airline flying domestic flights (which admittedly may go away in favor of trains) and the only airline flying between Austria and the US. Plenty of city pairs within Europe where they are also the only carrier.

The second part of your comment is so contradictory. Lauda survives BECAUSE they are financed by Ryanair. Lauda is not profitable and posted a 90m Euro lost last year. MOL is also demanding the emloyees of Lauda forgo their benefits and take pay cuts or close the company.

leghorn wrote:
There is a world of a difference between the aid which Ryanair has received and these subsidies.

There actually is not because there is no proof that Lauda/Ryanair would not receive subsidies if they formally asked for them.

Blerg wrote:
What Ryanair is saying is that if a German airline in Austria is to receive money then the Irish one should too. Ryanair is not insisting on 2/3, they are merely proposing a fair solution otherwise there is going to be a lawsuit coming their way. Personally I don't see what's so controversial here. I could have understood if Austrian Airlines was Austrian owned but they are not. The real question we should be asking ourselves is what will the money do for OS? Will it merely keep it alive so that it can keep on struggling or will there be concrete requirements for them to reform themselves in order to achieve profitability? So far it seems it's all about surviving and making it out alive.


Yes, the money will keep it alive through this unprecedented situation. And it will definitely come with terms and restrictions. I'm not sure why you're emphasizing OS struggling when Lauda is also not profitable. Anisec and Wizz are also most likely losing money in Vienna. At the end of the day this is all posturing because Ryanair doesn't want any sort of loan from the Austrian government for Lauda that would most likely come with terms they are unprepared to meet including a probable requirement that all staff be on Austrian and not Irish contracts.
 
Waterbomber2
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Re: Ryanair Threatens EU Over State Aid to Airlines

Sun Apr 26, 2020 9:17 pm

LJ wrote:
3AWM wrote:
MOL has to be right that these bailouts are illegal subsidies.


The EU has always allowed state aid in the form of a loan, which is on "commercial" rates in some circumstances (see Alitalia). To say that these are "illegal" subsidies one needs to know how the loans are constructed. Moreover, given the money available to help companies hit by this crisis, it will be difficult to argue that the loans are "illegal" (if structured correctly).

Blerg wrote:
Actually I expect a government in a free market economy not to provide aid to any private business, in this particular case Austrian Airlines


Which solves this discussion as a "free market economy" as you see it does not exist anywhere in the world.


The terms are important too, yes, but I like the UK's approach against VS.
Before requesting loans guaranteed or directly provided by governments, airlines should have to prove that all other avenues have been exhausted.

Governments shouldn't be too eager to provide relief and certainly shouldn't be offering to help certain groups like we see in Austria and Belgium.
That is a ridiculous and discriminatory attitude and makes everyone suspicious.
 
Galwayman
Posts: 901
Joined: Fri Mar 10, 2017 10:20 am

Re: Ryanair Threatens EU Over State Aid to Airlines

Sun Apr 26, 2020 9:28 pm

Ty134A wrote:
There are some aspects missing in this discussion. Austria is a bit different from the rest of the world when it comes to working contracts. There is a „partnership“ between unions and companies, basically they negotiate a working contract for every one working in this field (very simplified explained). These baseline contracts are binding for everybody working in this field, you can‘t pay below.

This Austrian tradition is holy to the people here, it ist Stalingrad for labour leftish parties. OS basically always attacked this kind of base contract since they became German, but never succeeded. Wizz only works with foreign staff here, which is why i recommend not flying with them, because this way they get around those baseline contracts. It is basically a Hungarian operation in Austria. And while Hungary alwasy is protective, why sould Austria welcome them here?

Then we have FR. They never bothered about these Austrian baseline contracts at all, blockt a union from forming in a way not acceptable to Austrian society. They suffer heavy from this publicity fail. MOL doesn‘t even understand what the concept behind all this is, therefore failing bigtime. Because of that, there is no support. MOL also doesn‘t understand the Austrian way of corruption, which is basically a political tie to every cent turned around in this country. He just doesn‘t get it, it is so funny... and he is making it even worse every day.

So, Austria will give OS money. Austria will not support a Hungarian airline exporting poverty into this country, and they will not support an airline with a very naive person insulting the Austrian culture and traditions over and over again, for no reason. Austria is in some aspects a bit different to the rest of the world.


Austrians have been voting with their wallets and will continue to do , the day of the overpaid unionised flight attendant and overcharging airfares are long gone
 
strfyr51
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Re: Ryanair Threatens EU Over State Aid to Airlines

Sun Apr 26, 2020 10:22 pm

Blerg wrote:
Good morning,

Seems like Ryanair is stepping up its fight against national airlines receiving state aid from their respective governments. It all started recently when the Austrian government expressed interest in financially supporting Austrian Airlines but not other airlines based in Austria (Lauda, Wizz Air and Level).

Now it seems the situation has escalated to such an extent that Ryanair is threatening the EU with legal action. From the article:

'Michael O’Leary, Ryanair’s chief executive, said in a letter to competition commissioner Margrethe Vestager that the European Union would be “forced into an embarrassing U-turn” on state aid if Ryanair won a legal challenge. The national programmes should be modified so that Ryanair could get a share of the bailout packages by making sure loan guarantees and other perks are available to “all EU airlines in proportion to their share of traffic in a particular country,” Mr O’Leary said in the April 9th letter seen by Bloomberg.'

To be honest this does seem like discrimination and they could potentially win in court especially in Austria. Austrian Airlines is actually a German company operating in Austria while Lauda is an Irish one also operating from Vienna. So how come one is eligible for state aid but the other isn't?

Let's see what becomes of this.

Source:
https://www.irishtimes.com/business/tra ... -1.4237144

I think O'Leary is talking Just to hear himself TALK! He want's to BE stateless in the EU but wants to be everybody's flag carrier! He can't have it both ways!!
 
oldJoe
Posts: 187
Joined: Fri Jan 10, 2020 11:04 pm

Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 3:12 am

oxonrow wrote:
Why are so many of you so down on FR? A late entrant onto the market that managed to shake things up. Yes, we should weed out unfair practices, but the way the law is laid out the airline does bring connectivity to places that didn't have it before or had no competition. Legacy carriers do not benefit from indirect subsidies? Can anyone seriously argue that? We have a major problem in this industry in Europe, where our petty nationalisms get in a way and make for a highly imperfect market. The likes of FR actually do tremendously well transcending this obstacle and we're all better for it as consumers. Next step is the environment, a serious issue to address, but let's move this discussion up a notch.


Why we should weed out unfair practises ??? If FR was fair at all in the past I guess at best they would be a small regional airline.
I live more or less near an airport ( in Germany ) wich pays FR money to fly there. As a taxpayer not flying FR why I should so ?
If FR tomorrow needs to pay local salaries ( it should be ) they are toast in a second
 
Blerg
Topic Author
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 4:57 am

LJ wrote:
3AWM wrote:
MOL has to be right that these bailouts are illegal subsidies.


The EU has always allowed state aid in the form of a loan, which is on "commercial" rates in some circumstances (see Alitalia). To say that these are "illegal" subsidies one needs to know how the loans are constructed. Moreover, given the money available to help companies hit by this crisis, it will be difficult to argue that the loans are "illegal" (if structured correctly).

Blerg wrote:
Actually I expect a government in a free market economy not to provide aid to any private business, in this particular case Austrian Airlines


Which solves this discussion as a "free market economy" as you see it does not exist anywhere in the world.


Since it doesn't exist in practice then maybe it's time to also remove it from EU legislation so as to allow countries to subsidize their industry as they see fit?
 
Blerg
Topic Author
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 5:07 am

NYCVIE wrote:
Waterbomber2 wrote:
Austrian Airlines for instance has no domestic flights, so all their flights are from Austria to another country.

This is not true. They fly up to fifteen domestic flights a day. Innsbruck, Salzburg, Graz, and Klagenfurt.

Waterbomber2 wrote:
So if the Austrian government helps OS, they can't reject requests from other airlines who are competing against OS.

As has been stated, no aid has been rejected as FR hasn't even formally requested it.

Blerg wrote:
I am sorry but how exactly is Austrian Airlines essential? Most of their routes have competition meaning that even if they were to go away the market would not suffer. This by definition doesn't make them essential, especially since they are not even an Austrian owned company.

Lauda is more essential than Austrian Airlines simply because they have a healthier business model which doesn't require them to be continuously financed by someone else. Pretty simple. So what value does Austrian Airlines bring to Austria that others couldn't compensate? Especially now when they are about to shrink by 20 aircraft and when they will start firing their employees.


LOL this actually made me laugh. Lauda employs around 1/8 the number of people OS employs to start. OS is the only airline flying domestic flights (which admittedly may go away in favor of trains) and the only airline flying between Austria and the US. Plenty of city pairs within Europe where they are also the only carrier.

The second part of your comment is so contradictory. Lauda survives BECAUSE they are financed by Ryanair. Lauda is not profitable and posted a 90m Euro lost last year. MOL is also demanding the emloyees of Lauda forgo their benefits and take pay cuts or close the company.

leghorn wrote:
There is a world of a difference between the aid which Ryanair has received and these subsidies.

There actually is not because there is no proof that Lauda/Ryanair would not receive subsidies if they formally asked for them.

Blerg wrote:
What Ryanair is saying is that if a German airline in Austria is to receive money then the Irish one should too. Ryanair is not insisting on 2/3, they are merely proposing a fair solution otherwise there is going to be a lawsuit coming their way. Personally I don't see what's so controversial here. I could have understood if Austrian Airlines was Austrian owned but they are not. The real question we should be asking ourselves is what will the money do for OS? Will it merely keep it alive so that it can keep on struggling or will there be concrete requirements for them to reform themselves in order to achieve profitability? So far it seems it's all about surviving and making it out alive.


Yes, the money will keep it alive through this unprecedented situation. And it will definitely come with terms and restrictions. I'm not sure why you're emphasizing OS struggling when Lauda is also not profitable. Anisec and Wizz are also most likely losing money in Vienna. At the end of the day this is all posturing because Ryanair doesn't want any sort of loan from the Austrian government for Lauda that would most likely come with terms they are unprepared to meet including a probable requirement that all staff be on Austrian and not Irish contracts.


Why is it contradictory? Lauda is part of Ryanair and they are the ones that are financing their survival, money is moved around internally. So why isn't Lufthansa financing Austrian Airlines the same way Ryanair is financing Lauda? Why do they need the government to assist them?

Of course Lauda employs 1/8 of what OS does but then again, how old is OS and how old is Lauda? Maybe your answer is there. Furthermore, are you really using the US argument as an advantage just after OS discontinued MIA and downgraded LAX to a summer seasonal destination with fewer frequencies? Seems like the market might not be that big. Makes you wonder how big it would be if you remove transfers. As for their domestic network, here's a link where you can see that even last summer they claimed they were loss-making and mostly there for transfer passengers: https://simpleflying.com/austrian-airli ... ic-routes/

If they can't profitably operate flights from Vienna then maybe some other airlines (Lufthansa, Swiss, KLM, Air France) can give them a try? So domestic network can survive but only as long local governments, airports and cities are willing to subsidize OS' flights.
 
Blerg
Topic Author
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 5:12 am

'Yes, the money will keep it alive through this unprecedented situation. And it will definitely come with terms and restrictions. I'm not sure why you're emphasizing OS struggling when Lauda is also not profitable. Anisec and Wizz are also most likely losing money in Vienna. At the end of the day this is all posturing because Ryanair doesn't want any sort of loan from the Austrian government for Lauda that would most likely come with terms they are unprepared to meet including a probable requirement that all staff be on Austrian and not Irish contracts'

Yet Austrian Airlines is the only one in Vienna that is not financially supported by their parent company but they are rather running to the government. Let's not forget that LH Group even refused to invest in OS when the business environment was highly favorable. If the Austrian government is going to bail them out then the least LH Group can do is transfer back 51% of their shares to the government. After all, if parent companies are going to support Lauda, Wizz Air and Level, then why is it crazy to expect the same for Austrian Airlines and LH Group?
 
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seahawk
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 5:19 am

He is spot on. No airline should get government money. It would help to cleanse the market of the fat and lazy like LH group.
 
Waterbomber2
Posts: 1294
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 5:30 am

Blerg wrote:
LJ wrote:
3AWM wrote:
MOL has to be right that these bailouts are illegal subsidies.


The EU has always allowed state aid in the form of a loan, which is on "commercial" rates in some circumstances (see Alitalia). To say that these are "illegal" subsidies one needs to know how the loans are constructed. Moreover, given the money available to help companies hit by this crisis, it will be difficult to argue that the loans are "illegal" (if structured correctly).

Blerg wrote:
Actually I expect a government in a free market economy not to provide aid to any private business, in this particular case Austrian Airlines


Which solves this discussion as a "free market economy" as you see it does not exist anywhere in the world.


Since it doesn't exist in practice then maybe it's time to also remove it from EU legislation so as to allow countries to subsidize their industry as they see fit?


I agree with this and this is why we can't emphasise enough how the current situation with AF-KLM and LH Group is totally unfair.
Malev, Cyprus Airways have been sent to the scrappers by EU legislation and AZ was refused large subsidies that could have made it very competitive against Ryanair, but also the EU3, based on that same legislation.
Now the EU suddenly suspends this legislation because some 'favorite' airlines have not prepared for the pandemic, preferring to post big earnings and distribute them (or reduce losses) rather than de-risk their businesses.

Rules need to be applied through thick and thin, it's up to businesses to manage their own risk.
 
bennett123
Posts: 9733
Joined: Sun Aug 15, 2004 12:49 am

Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 6:11 am

Malev, Cyprus Airways and Alitalia are nothing to do with COVID.

Until this came along, the other airlines were viable.
 
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seahawk
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 6:24 am

Waterbomber2 wrote:
Blerg wrote:
LJ wrote:

The EU has always allowed state aid in the form of a loan, which is on "commercial" rates in some circumstances (see Alitalia). To say that these are "illegal" subsidies one needs to know how the loans are constructed. Moreover, given the money available to help companies hit by this crisis, it will be difficult to argue that the loans are "illegal" (if structured correctly).



Which solves this discussion as a "free market economy" as you see it does not exist anywhere in the world.


Since it doesn't exist in practice then maybe it's time to also remove it from EU legislation so as to allow countries to subsidize their industry as they see fit?


I agree with this and this is why we can't emphasise enough how the current situation with AF-KLM and LH Group is totally unfair.
Malev, Cyprus Airways have been sent to the scrappers by EU legislation and AZ was refused large subsidies that could have made it very competitive against Ryanair, but also the EU3, based on that same legislation.
Now the EU suddenly suspends this legislation because some 'favorite' airlines have not prepared for the pandemic, preferring to post big earnings and distribute them (or reduce losses) rather than de-risk their businesses.

Rules need to be applied through thick and thin, it's up to businesses to manage their own risk.


Agree. Not one Euro from the taxpayer for the airlines.
 
Westerwaelder
Posts: 240
Joined: Fri Apr 03, 2020 12:27 pm

Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 7:13 am

seahawk wrote:
Waterbomber2 wrote:
Blerg wrote:

Since it doesn't exist in practice then maybe it's time to also remove it from EU legislation so as to allow countries to subsidize their industry as they see fit?


I agree with this and this is why we can't emphasise enough how the current situation with AF-KLM and LH Group is totally unfair.
Malev, Cyprus Airways have been sent to the scrappers by EU legislation and AZ was refused large subsidies that could have made it very competitive against Ryanair, but also the EU3, based on that same legislation.
Now the EU suddenly suspends this legislation because some 'favorite' airlines have not prepared for the pandemic, preferring to post big earnings and distribute them (or reduce losses) rather than de-risk their businesses.

Rules need to be applied through thick and thin, it's up to businesses to manage their own risk.


Agree. Not one Euro from the taxpayer for the airlines.


What would that look like in a few months time? Most airlines in Europe would be closed for good. The US3 gone. This is just nonsense. Malev and Cyprus Airways were basket cases at the best of times. They were not viable businesses. This is an unprecedented crisis. And while I agree that many airlines should have been better prepared (record dividends, share buy backs etc..), this crisis is not one many companies would be able to withstand. Therefore airlines that were consistently profitable before Covid should get the money they need (as secured loans with conditions attached) to see them through.
I can not believe your AZ comment. Read up on it. How would a bloated AZ with their staff and dual long haul hub structure ever be able to compete against Ryanair? I would be very interested for you to share links to the facts behind that claim.
 
Blerg
Topic Author
Posts: 4064
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 7:54 am

Westerwaelder wrote:
seahawk wrote:
Waterbomber2 wrote:

I agree with this and this is why we can't emphasise enough how the current situation with AF-KLM and LH Group is totally unfair.
Malev, Cyprus Airways have been sent to the scrappers by EU legislation and AZ was refused large subsidies that could have made it very competitive against Ryanair, but also the EU3, based on that same legislation.
Now the EU suddenly suspends this legislation because some 'favorite' airlines have not prepared for the pandemic, preferring to post big earnings and distribute them (or reduce losses) rather than de-risk their businesses.

Rules need to be applied through thick and thin, it's up to businesses to manage their own risk.


Agree. Not one Euro from the taxpayer for the airlines.


What would that look like in a few months time? Most airlines in Europe would be closed for good. The US3 gone. This is just nonsense. Malev and Cyprus Airways were basket cases at the best of times. They were not viable businesses. This is an unprecedented crisis. And while I agree that many airlines should have been better prepared (record dividends, share buy backs etc..), this crisis is not one many companies would be able to withstand. Therefore airlines that were consistently profitable before Covid should get the money they need (as secured loans with conditions attached) to see them through.
I can not believe your AZ comment. Read up on it. How would a bloated AZ with their staff and dual long haul hub structure ever be able to compete against Ryanair? I would be very interested for you to share links to the facts behind that claim.


What are you going on about? Are you implying that Austrian Airlines was a perfectly run and highly profitable airline before Corona? So why not bankrupt them like the EU did with MA and CY? These two airlines could have been reformed or even privatized but the EU preferred to take the easy way out and shut them down. Now, we are witnessing the EU give a lifeline to a whole bunch of airlines that otherwise wouldn't have made it. Another example is BT which overexpanded big time in recent years and which recorded extremely bad financial results last year (especially in H1 2019). Even before that their financial performance wasn't stellar.

At the end of the day, Austrian Airlines is a failing airline with an uncompetitive cost structure. Once they get the money and the crisis passes it will be business as usual. What if the Austrian government guarantees some loans for them and if they end up declaring bankruptcy a year later? It's not going to be Germany or Lufthansa who will foot the bill, it will be the Austrian taxpayers.
 
fraT
Posts: 1174
Joined: Wed Oct 01, 2003 4:32 am

Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 8:10 am

Blerg wrote:
Westerwaelder wrote:
seahawk wrote:

Agree. Not one Euro from the taxpayer for the airlines.


What would that look like in a few months time? Most airlines in Europe would be closed for good. The US3 gone. This is just nonsense. Malev and Cyprus Airways were basket cases at the best of times. They were not viable businesses. This is an unprecedented crisis. And while I agree that many airlines should have been better prepared (record dividends, share buy backs etc..), this crisis is not one many companies would be able to withstand. Therefore airlines that were consistently profitable before Covid should get the money they need (as secured loans with conditions attached) to see them through.
I can not believe your AZ comment. Read up on it. How would a bloated AZ with their staff and dual long haul hub structure ever be able to compete against Ryanair? I would be very interested for you to share links to the facts behind that claim.


What are you going on about? Are you implying that Austrian Airlines was a perfectly run and highly profitable airline before Corona? So why not bankrupt them like the EU did with MA and CY? These two airlines could have been reformed or even privatized but the EU preferred to take the easy way out and shut them down. Now, we are witnessing the EU give a lifeline to a whole bunch of airlines that otherwise wouldn't have made it. Another example is BT which overexpanded big time in recent years and which recorded extremely bad financial results last year (especially in H1 2019). Even before that their financial performance wasn't stellar.

At the end of the day, Austrian Airlines is a failing airline with an uncompetitive cost structure. Once they get the money and the crisis passes it will be business as usual. What if the Austrian government guarantees some loans for them and if they end up declaring bankruptcy a year later? It's not going to be Germany or Lufthansa who will foot the bill, it will be the Austrian taxpayers.


While OS was not highly profitable as LH and LX, they were also not losing tons of money.
The Q4 results as the most recent "normal" quarter show a bigger loss at Lauda. So by your arguments shouldn't Lauda be shut down before OS?

Sources:
https://www.austrianairlines.ag/~/media/8687FA1044E84A5C80A570163DACB3C8.ashx
https://www.aerotime.aero/rytis.beresnevicius/24436-ryanair-profit-guidance-fy-2020 (I couldn't find the official release from Lauda/Ryanair but I guess the numbers are correct).
 
jules48
Posts: 25
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 8:12 am

But its alright to register half of your fleet in Malta to avoid paying taxes.Hypocrite.
 
Blerg
Topic Author
Posts: 4064
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 8:18 am

fraT wrote:
Blerg wrote:
Westerwaelder wrote:

What would that look like in a few months time? Most airlines in Europe would be closed for good. The US3 gone. This is just nonsense. Malev and Cyprus Airways were basket cases at the best of times. They were not viable businesses. This is an unprecedented crisis. And while I agree that many airlines should have been better prepared (record dividends, share buy backs etc..), this crisis is not one many companies would be able to withstand. Therefore airlines that were consistently profitable before Covid should get the money they need (as secured loans with conditions attached) to see them through.
I can not believe your AZ comment. Read up on it. How would a bloated AZ with their staff and dual long haul hub structure ever be able to compete against Ryanair? I would be very interested for you to share links to the facts behind that claim.


What are you going on about? Are you implying that Austrian Airlines was a perfectly run and highly profitable airline before Corona? So why not bankrupt them like the EU did with MA and CY? These two airlines could have been reformed or even privatized but the EU preferred to take the easy way out and shut them down. Now, we are witnessing the EU give a lifeline to a whole bunch of airlines that otherwise wouldn't have made it. Another example is BT which overexpanded big time in recent years and which recorded extremely bad financial results last year (especially in H1 2019). Even before that their financial performance wasn't stellar.

At the end of the day, Austrian Airlines is a failing airline with an uncompetitive cost structure. Once they get the money and the crisis passes it will be business as usual. What if the Austrian government guarantees some loans for them and if they end up declaring bankruptcy a year later? It's not going to be Germany or Lufthansa who will foot the bill, it will be the Austrian taxpayers.


While OS was not highly profitable as LH and LX, they were also not losing tons of money.
The Q4 results as the most recent "normal" quarter show a bigger loss at Lauda. So by your arguments shouldn't Lauda be shut down before OS?

Sources:
https://www.austrianairlines.ag/~/media/8687FA1044E84A5C80A570163DACB3C8.ashx
https://www.aerotime.aero/rytis.beresnevicius/24436-ryanair-profit-guidance-fy-2020 (I couldn't find the official release from Lauda/Ryanair but I guess the numbers are correct).


Why don't you read the thread more carefully before commenting? No one would care if OS was being saved by LH Group the same way Lauda is being saved by its parent company, Ryanair. Lauda is not relying on Austrian taxpayers and government for its survival, Austrian Airlines is. See the difference?

As for Austrian Airlines, their financial performance is far from good.

What we have there is their EBIT profit meaning that's what they made before taxes and other obligations. So they were at least breaking-even once taxes were paid.

EBIT
2017: €100 million
2018: €90 million
2019: €17 million

All this while carrying much more passengers meaning that its cost structure is uncompetitive. OS has a choice, either adapt to new realities or cease to exist. Naturally there is always the option of VIE kicking out LCCs or hiking their charges in order to protect Austrian Airlines.
 
Blerg
Topic Author
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 8:18 am

jules48 wrote:
But its alright to register half of your fleet in Malta to avoid paying taxes.Hypocrite.


Obviously it's alright since it's not illegal.
 
Westerwaelder
Posts: 240
Joined: Fri Apr 03, 2020 12:27 pm

Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 8:21 am

Blerg wrote:
Westerwaelder wrote:
seahawk wrote:

Agree. Not one Euro from the taxpayer for the airlines.


What would that look like in a few months time? Most airlines in Europe would be closed for good. The US3 gone. This is just nonsense. Malev and Cyprus Airways were basket cases at the best of times. They were not viable businesses. This is an unprecedented crisis. And while I agree that many airlines should have been better prepared (record dividends, share buy backs etc..), this crisis is not one many companies would be able to withstand. Therefore airlines that were consistently profitable before Covid should get the money they need (as secured loans with conditions attached) to see them through.
I can not believe your AZ comment. Read up on it. How would a bloated AZ with their staff and dual long haul hub structure ever be able to compete against Ryanair? I would be very interested for you to share links to the facts behind that claim.


What are you going on about? Are you implying that Austrian Airlines was a perfectly run and highly profitable airline before Corona? So why not bankrupt them like the EU did with MA and CY? These two airlines could have been reformed or even privatized but the EU preferred to take the easy way out and shut them down. Now, we are witnessing the EU give a lifeline to a whole bunch of airlines that otherwise wouldn't have made it. Another example is BT which overexpanded big time in recent years and which recorded extremely bad financial results last year (especially in H1 2019). Even before that their financial performance wasn't stellar.

At the end of the day, Austrian Airlines is a failing airline with an uncompetitive cost structure. Once they get the money and the crisis passes it will be business as usual. What if the Austrian government guarantees some loans for them and if they end up declaring bankruptcy a year later? It's not going to be Germany or Lufthansa who will foot the bill, it will be the Austrian taxpayers.


No matter what you might think about OS, it was not a failing airline before Covid. There was no question of it being threatened by liquidation. . It's owned by the LH group and performs a function within their home markets. No question, with the sudden influx of low cost competition in Vienna they will have to take a long hard look at their business model if that pressure persists. But as part of a wider (and until recently very successful group) they were not reliant on state subsidies. That is the crucial difference.

This constant comparing Malev and Cyprus Airways, airlines that found it impossible to compete and required state subsidies to the LH group is ludicrous. If Malev or CY were considered sound investments by anyone (anyone not on A.Net that is) they would have been bought and would still be flying. As the case is, they are not.

Why is this so hard to understand for so many on here? The rules on subsidies within the EU have been relaxed in the wake of the crisis. If LH were the only ones in trouble, Germany would have to do an Italy/AZ to keep them flying. As it is a world wide issues, countries are permitted to support their airlines in this crisis.
 
Blerg
Topic Author
Posts: 4064
Joined: Tue Jan 09, 2018 11:42 am

Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 8:25 am

Westerwaelder wrote:
Blerg wrote:
Westerwaelder wrote:

What would that look like in a few months time? Most airlines in Europe would be closed for good. The US3 gone. This is just nonsense. Malev and Cyprus Airways were basket cases at the best of times. They were not viable businesses. This is an unprecedented crisis. And while I agree that many airlines should have been better prepared (record dividends, share buy backs etc..), this crisis is not one many companies would be able to withstand. Therefore airlines that were consistently profitable before Covid should get the money they need (as secured loans with conditions attached) to see them through.
I can not believe your AZ comment. Read up on it. How would a bloated AZ with their staff and dual long haul hub structure ever be able to compete against Ryanair? I would be very interested for you to share links to the facts behind that claim.


What are you going on about? Are you implying that Austrian Airlines was a perfectly run and highly profitable airline before Corona? So why not bankrupt them like the EU did with MA and CY? These two airlines could have been reformed or even privatized but the EU preferred to take the easy way out and shut them down. Now, we are witnessing the EU give a lifeline to a whole bunch of airlines that otherwise wouldn't have made it. Another example is BT which overexpanded big time in recent years and which recorded extremely bad financial results last year (especially in H1 2019). Even before that their financial performance wasn't stellar.

At the end of the day, Austrian Airlines is a failing airline with an uncompetitive cost structure. Once they get the money and the crisis passes it will be business as usual. What if the Austrian government guarantees some loans for them and if they end up declaring bankruptcy a year later? It's not going to be Germany or Lufthansa who will foot the bill, it will be the Austrian taxpayers.


No matter what you might think about OS, it was not a failing airline before Covid. There was no question of it being threatened by liquidation. . It's owned by the LH group and performs a function within their home markets. No question, with the sudden influx of low cost competition in Vienna they will have to take a long hard look at their business model if that pressure persists. But as part of a wider (and until recently very successful group) they were not reliant on state subsidies. That is the crucial difference.

This constant comparing Malev and Cyprus Airways, airlines that found it impossible to compete and required state subsidies to the LH group is ludicrous. If Malev or CY were considered sound investments by anyone (anyone not on A.Net that is) they would have been bought and would still be flying. As the case is, they are not.

Why is this so hard to understand for so many on here? The rules on subsidies within the EU have been relaxed in the wake of the crisis. If LH were the only ones in trouble, Germany would have to do an Italy/AZ to keep them flying. As it is a world wide issues, countries are permitted to support their airlines in this crisis.


If Austrian Airlines was such a stable and strong carrier before corona then why did LH Group refuse to invest in their long-haul product? Meanwhile LX got new planes and kept on expanding. There were most likely some doubts within the groupation regarding the validity and stability of their Austrian business. Very simple.
 
leghorn
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 8:26 am

oldJoe wrote:
I live more or less near an airport ( in Germany ) wich pays FR money to fly there. As a taxpayer not flying FR why I should so ?
If FR tomorrow needs to pay local salaries ( it should be ) they are toast in a second

They pay an airline to fly there and the airline happens to be Ryanair. That airport could just as easily have found another airline to fly if the airline thought they could turn a profit on the route.
It seems to me your ire with support for private companies should be directed at your airport/regional government, not Ryanair.
 
Westerwaelder
Posts: 240
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 8:29 am

Blerg wrote:
Westerwaelder wrote:
Blerg wrote:

What are you going on about? Are you implying that Austrian Airlines was a perfectly run and highly profitable airline before Corona? So why not bankrupt them like the EU did with MA and CY? These two airlines could have been reformed or even privatized but the EU preferred to take the easy way out and shut them down. Now, we are witnessing the EU give a lifeline to a whole bunch of airlines that otherwise wouldn't have made it. Another example is BT which overexpanded big time in recent years and which recorded extremely bad financial results last year (especially in H1 2019). Even before that their financial performance wasn't stellar.

At the end of the day, Austrian Airlines is a failing airline with an uncompetitive cost structure. Once they get the money and the crisis passes it will be business as usual. What if the Austrian government guarantees some loans for them and if they end up declaring bankruptcy a year later? It's not going to be Germany or Lufthansa who will foot the bill, it will be the Austrian taxpayers.


No matter what you might think about OS, it was not a failing airline before Covid. There was no question of it being threatened by liquidation. . It's owned by the LH group and performs a function within their home markets. No question, with the sudden influx of low cost competition in Vienna they will have to take a long hard look at their business model if that pressure persists. But as part of a wider (and until recently very successful group) they were not reliant on state subsidies. That is the crucial difference.

This constant comparing Malev and Cyprus Airways, airlines that found it impossible to compete and required state subsidies to the LH group is ludicrous. If Malev or CY were considered sound investments by anyone (anyone not on A.Net that is) they would have been bought and would still be flying. As the case is, they are not.

Why is this so hard to understand for so many on here? The rules on subsidies within the EU have been relaxed in the wake of the crisis. If LH were the only ones in trouble, Germany would have to do an Italy/AZ to keep them flying. As it is a world wide issues, countries are permitted to support their airlines in this crisis.


If Austrian Airlines was such a stable and strong carrier before corona then why did LH Group refuse to invest in their long-haul product? Meanwhile LX got new planes and kept on expanding. There were most likely some doubts within the groupation regarding the validity and stability of their Austrian business. Very simple.


If you read beyond the first line, you could see that no one is claiming OS was strong and stable. It was however also not on state funded life support.

It's immaterial in this new scenario of relaxed state aid rules. Those who made it this far (AZ and others) are in luck and can be legally saved by the governments that see fit to do so. That's all. If Malev and CY were still around, they too would be eligible.
 
Blerg
Topic Author
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 8:31 am

Westerwaelder wrote:
Blerg wrote:
Westerwaelder wrote:

No matter what you might think about OS, it was not a failing airline before Covid. There was no question of it being threatened by liquidation. . It's owned by the LH group and performs a function within their home markets. No question, with the sudden influx of low cost competition in Vienna they will have to take a long hard look at their business model if that pressure persists. But as part of a wider (and until recently very successful group) they were not reliant on state subsidies. That is the crucial difference.

This constant comparing Malev and Cyprus Airways, airlines that found it impossible to compete and required state subsidies to the LH group is ludicrous. If Malev or CY were considered sound investments by anyone (anyone not on A.Net that is) they would have been bought and would still be flying. As the case is, they are not.

Why is this so hard to understand for so many on here? The rules on subsidies within the EU have been relaxed in the wake of the crisis. If LH were the only ones in trouble, Germany would have to do an Italy/AZ to keep them flying. As it is a world wide issues, countries are permitted to support their airlines in this crisis.


If Austrian Airlines was such a stable and strong carrier before corona then why did LH Group refuse to invest in their long-haul product? Meanwhile LX got new planes and kept on expanding. There were most likely some doubts within the groupation regarding the validity and stability of their Austrian business. Very simple.


If you read beyond the first line, you could see that no one is claiming OS was strong and stable. It was however also not on state funded life support.

It's immaterial in this new scenario of relaxed state aid rules. Those who made it this far (AZ and others) are in luck and can be legally saved by the governments that see fit to do so. That's all. If Malev and CY were still around, they too would be eligible.


And my point is that under new circumstances OS does not have a chance to survive unless it is forced to reform and reduce its cost structure. Otherwise the money it will receive will just delay the inevitable.
 
sabenapilot
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 8:35 am

May I kindly point out they have posted a positive EBIT for at least the last 5 years?
So 'failing' and 'unprofitable' are 2 adjectives you attribute rather wildly, in order to paint a picture that suits the fake news you want to spread far more than it matches reality...

May I remind you once more are no Austrian taxpayer, and thus not exactly entitled to an opinion on how they spend their taxpayers money, and that the sole argument you had as a non-Austrian (i.e. that they were allegedly favouring one foreign held company over another) is completely debunked by now as MOL himself refuses to negotiate an aid package for his failing Lauda subsidiary which is losing close to a hundred million euro annually, despite being 8 times smaller than the succesful and profitable Austrian Airlines?
 
Blerg
Topic Author
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 8:40 am

sabenapilot wrote:
May I kindly point out they have posted a positive EBIT for at least the last 5 years?
So 'failing' and 'unprofitable' are 2 adjectives you attribute rather wildly, in order to paint a picture that suits the fake news you want to spread far more than it matches reality...

May I remind you once more are no Austrian taxpayer, and thus not exactly entitled to an opinion on how they spend their taxpayers money, and that the sole argument you had as a non-Austrian (i.e. that they were allegedly favouring one foreign held company over another) is completely debunked by now as MOL himself refuses to negotiate an aid package for his failing Lauda subsidiary which is losing close to a hundred million euro annually, despite being 8 times smaller than the succesful and profitable Austrian Airlines?


Do you have a source to back up your claim that MOL refused to negotiate with the Austrian government? Also you do realize just because they were profitable before EBIT doesn't mean they were still after paying taxes?

By the way, are you an Austrian taxpayer?
 
Westerwaelder
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 8:40 am

Blerg wrote:
Westerwaelder wrote:
Blerg wrote:

If Austrian Airlines was such a stable and strong carrier before corona then why did LH Group refuse to invest in their long-haul product? Meanwhile LX got new planes and kept on expanding. There were most likely some doubts within the groupation regarding the validity and stability of their Austrian business. Very simple.


If you read beyond the first line, you could see that no one is claiming OS was strong and stable. It was however also not on state funded life support.

It's immaterial in this new scenario of relaxed state aid rules. Those who made it this far (AZ and others) are in luck and can be legally saved by the governments that see fit to do so. That's all. If Malev and CY were still around, they too would be eligible.


And my point is that under new circumstances OS does not have a chance to survive unless it is forced to reform and reduce its cost structure. Otherwise the money it will receive will just delay the inevitable.


We agree then. Business as usual is not an option for OS. It remains to be seen how much of Wizz, Level, Lauda competition remains in Vienna but in either case, it will be enough to force a re-think.

The countries where LH group carriers are based tend to look beyond the statistics at factors like social cohesion and employee welfare. And the LH group in general is seen as a responsible employer (there are exceptions as we saw with Germanwings) and that counts for a lot. FR is not seen as being so high up on that list...
 
User avatar
c933103
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 8:44 am

That's why you do these things at EU level
It's pointless to attempt winning internet debate.
Nyan! Nyan! Nyan! Nyan! Nyan! Nyan! Nyan! Nyan!
Meow Meow Meow! Meow Meow Meow Meow!
 
Theseus
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 8:58 am

Dahlgardo wrote:
Ryanair has sucked many millions out of local airport and municipals and has been convicted in several countries for recieving illegal subsidies.


This was my first thought as soon as I saw the thread title. Ryanair is probably the airlines that has received the greatest amount of "aid" in the last two decades in Europe...
 
sabenapilot
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 9:26 am

Blerg wrote:
source to back up your claim that MOL refused to negotiate with the Austrian government?

The initiative has to come from the beneficiary in this.
It's really not up to any national government to see which foreign owned businesses operating in their country need some form of financial help, let alone to know how much. Just as banks don't come knock on your door, asking if you need more credit either.
You make the weirdest of suggestions, Blerg.

So, given the initiative has to come from the airline, has MOL officially asked for a meeting with the government yet?
Has he already presented a solid plan to restructure his failing, heavily loss making and totally unsuccessful Lauda Motion (even just their EBIT is deep in the red)?
Is he willing to commit to certain environmental, social and ecological standard practices demanded by the Austrian government to increase the sustainability of the nation's aviation, even if it means increasing ticket prices through environmental taxes, reducing passenger volumes to better match the naturally required capacities and giving them a share in any future profits from it?

The absence of any such things in MOLs comments indicates to me he's indeed refusing to negotiate on these terms, but like you said yourself, we don't know for sure indeed, which however leads me to this very pertinent question then: just on what have you been basing all of your comments that Austia is somehow favouring one airline over the other, for the past 3 days then??? If you and I don't know if MOL is locked out or not? ;)
 
Jomar777
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 9:41 am

I must say I do not endeavor with MOL at all but he somehow has a point. And I am not speaking about the Austrian Government but the EU as a whole.
The EU states that fair competition is paramount - yet it allows some governments to provide support on commercial airlines whilst others do not/cannot.
AF/KL are reportedly to be in line for some - where is the fair competition here?
Obviously, there need to be more clarity of how much and how Austrian is receiving their aid but these measures should be EU-wide rather than country wide - even more on the Euro Zone.
 
fraT
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 9:42 am

Blerg wrote:
fraT wrote:
Blerg wrote:

What are you going on about? Are you implying that Austrian Airlines was a perfectly run and highly profitable airline before Corona? So why not bankrupt them like the EU did with MA and CY? These two airlines could have been reformed or even privatized but the EU preferred to take the easy way out and shut them down. Now, we are witnessing the EU give a lifeline to a whole bunch of airlines that otherwise wouldn't have made it. Another example is BT which overexpanded big time in recent years and which recorded extremely bad financial results last year (especially in H1 2019). Even before that their financial performance wasn't stellar.

At the end of the day, Austrian Airlines is a failing airline with an uncompetitive cost structure. Once they get the money and the crisis passes it will be business as usual. What if the Austrian government guarantees some loans for them and if they end up declaring bankruptcy a year later? It's not going to be Germany or Lufthansa who will foot the bill, it will be the Austrian taxpayers.


While OS was not highly profitable as LH and LX, they were also not losing tons of money.
The Q4 results as the most recent "normal" quarter show a bigger loss at Lauda. So by your arguments shouldn't Lauda be shut down before OS?

Sources:
https://www.austrianairlines.ag/~/media/8687FA1044E84A5C80A570163DACB3C8.ashx
https://www.aerotime.aero/rytis.beresnevicius/24436-ryanair-profit-guidance-fy-2020 (I couldn't find the official release from Lauda/Ryanair but I guess the numbers are correct).


Why don't you read the thread more carefully before commenting? No one would care if OS was being saved by LH Group the same way Lauda is being saved by its parent company, Ryanair. Lauda is not relying on Austrian taxpayers and government for its survival, Austrian Airlines is. See the difference?

As for Austrian Airlines, their financial performance is far from good.

What we have there is their EBIT profit meaning that's what they made before taxes and other obligations. So they were at least breaking-even once taxes were paid.

EBIT
2017: €100 million
2018: €90 million
2019: €17 million

All this while carrying much more passengers meaning that its cost structure is uncompetitive. OS has a choice, either adapt to new realities or cease to exist. Naturally there is always the option of VIE kicking out LCCs or hiking their charges in order to protect Austrian Airlines.


I am actually reading very carefully, so no need to imply that. Austrian did made small profits in recent years, so the comparison with loss making carriers lime Malev, Cyprus or Alitalia is not really valid. Let's see if Ryanair won't ask for any aid, especially for Lauda, because I doubt that MOL will continue to accept losses (which they had even before the crisis). If he really thinks that the tourism industry will recover quickly then reality will hit him pretty hard.

As others have mentioned, OS definitely needs to adapt to the new reality, as all other carriers also need to. We will also see if major airports will continue to push the LCCs. One could see in FRA what happened once the discounted fees for LCCs expired. Wizz decided to discontinue their flights well before the Corona outbreak. Of course the situation has changed with the virus but lets see what happens when the discounts expire for Ryanair. Airports are suffering as well and I doubt that they will continue to treat their best customers different than some LCCs who disappear once they have to pay the same fees as everybody else (not sure about whether the fees are different in VIE but it's the case in FRA).
 
Blerg
Topic Author
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 9:51 am

sabenapilot wrote:
Blerg wrote:
source to back up your claim that MOL refused to negotiate with the Austrian government?

The initiative has to come from the beneficiary in this.
It's really not up to any national government to see which foreign owned businesses operating in their country need some form of financial help, let alone to know how much. Just as banks don't come knock on your door, asking if you need more credit either.
You make the weirdest of suggestions, Blerg.

So, given the initiative has to come from the airline, has MOL officially asked for a meeting with the government yet?
Has he already presented a solid plan to restructure his failing, heavily loss making and totally unsuccessful Lauda Motion (even just their EBIT is deep in the red)?
Is he willing to commit to certain environmental, social and ecological standard practices demanded by the Austrian government to increase the sustainability of the nation's aviation, even if it means increasing ticket prices through environmental taxes, reducing passenger volumes to better match the naturally required capacities and giving them a share in any future profits from it?

The absence of any such things in MOLs comments indicates to me he's indeed refusing to negotiate on these terms, but like you said yourself, we don't know for sure indeed, which however leads me to this very pertinent question then: just on what have you been basing all of your comments that Austia is somehow favouring one airline over the other, for the past 3 days then??? If you and I don't know if MOL is locked out or not? ;)


Ok, so no source to back your argument. That's all I needed.
 
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seahawk
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 10:05 am

Jomar777 wrote:
I must say I do not endeavor with MOL at all but he somehow has a point. And I am not speaking about the Austrian Government but the EU as a whole.
The EU states that fair competition is paramount - yet it allows some governments to provide support on commercial airlines whilst others do not/cannot.
AF/KL are reportedly to be in line for some - where is the fair competition here?
Obviously, there need to be more clarity of how much and how Austrian is receiving their aid but these measures should be EU-wide rather than country wide - even more on the Euro Zone.


During this crisis every country is free to help the companies they want to help. I am sure Lauda could get government money, but they simply do not like the attached strings. For the simple reason that it would mean that their move to cut crew costs by forcing the crews to accept lower pay, would implode with state aid, which demands that current labour contracts remain unchanged.
 
leghorn
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 10:32 am

seahawk wrote:
I am sure Lauda could get government money, but they simply do not like the attached strings. For the simple reason that it would mean that their move to cut crew costs by forcing the crews to accept lower pay, would implode with state aid, which demands that current labour contracts remain unchanged.

Ryanair are compliant with the E.U. law of the country in which the employees are employed and the company is operating in the broader E.U. therefore the Company should not be at a competitive disadvantage to others but this support puts Ryanair at a competitive disadvantage.
Ryanair are cash rich (or at least not poor) and can afford to wait until later to get the correct result in Court. The damages incurred to Ryanair will then have to be made good.
 
Blerg
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 10:47 am

Wizz Air has also spoken against state aid given to LH Group airlines. Airline official said that it is throwing good money after bad money and that it would be used to support airlines that struggled even before Corona.

Source: https://www.austrianaviation.net/detail ... 0-starten/

It is also reported that Wizz Air will resume certain Vienna flight starting from May 1st. They expect initially for demand to remain low but they will stimulate demand through low fares.
 
Westerwaelder
Posts: 240
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 12:17 pm

[list=][/list]
Jomar777 wrote:
I must say I do not endeavor with MOL at all but he somehow has a point. And I am not speaking about the Austrian Government but the EU as a whole.
The EU states that fair competition is paramount - yet it allows some governments to provide support on commercial airlines whilst others do not/cannot.
AF/KL are reportedly to be in line for some - where is the fair competition here?
Obviously, there need to be more clarity of how much and how Austrian is receiving their aid but these measures should be EU-wide rather than country wide - even more on the Euro Zone.


The EU stance is very clear on state aid. They are however a very pragmatic organisation. In this current crisis, no one is told they can't support any of their companies. It is and largely has been a level playing field for all. Anyone like MOL who cries out for equal amounts to be distributed to all is either in complete denial of the severity of the situation or deliberately uses sound bites to create publicity for themselves.
 
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seahawk
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 2:25 pm

leghorn wrote:
seahawk wrote:
I am sure Lauda could get government money, but they simply do not like the attached strings. For the simple reason that it would mean that their move to cut crew costs by forcing the crews to accept lower pay, would implode with state aid, which demands that current labour contracts remain unchanged.

Ryanair are compliant with the E.U. law of the country in which the employees are employed and the company is operating in the broader E.U. therefore the Company should not be at a competitive disadvantage to others but this support puts Ryanair at a competitive disadvantage.
Ryanair are cash rich (or at least not poor) and can afford to wait until later to get the correct result in Court. The damages incurred to Ryanair will then have to be made good.


Considering that FR put an ultimatum on the employees of the Vienna base to either accept a 5-15% paycut or be fired and the government has made it clear that government money can only be had if existing labour contracts remain unchanged, it is up to FR to decide what it should be.
 
Galore
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 3:21 pm

oxonrow wrote:
Why are so many of you so down on FR?


For me, it’s because this airline resulted in a downward spiral of product quality. It’s optimized to transport people from A to B without regard to quality. Coach on the legacies like AUA was never great but at least ok. Ryanair figured that people rather pay less and endure even less comfort. The end result is that every airline now packs people like sardines. AUA and other “full service” airlines figured that they can even expand this model to international long haul so now we have 10 abreast 777 in coach without good recline on skinny hard chairs. That’s what you now get for $1200 RT DFW-VIE. If you want better quality you’ll have to shell out $7000 for Business Class or find a carrier who offers premium economy for like $2000.

Before this race to the bottom thanks to companies like Ryanair, coach for a flight like that costing around $1200 (adjusted for inflation) was ok. Now it’s absolutely miserable with typically only an extremely expensive upgrade as an escape from torture for 12 hours.
 
NYCVIE
Posts: 284
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Re: Ryanair Threatens EU Over State Aid to Airlines

Mon Apr 27, 2020 3:25 pm

Blerg wrote:
Why is it contradictory? Lauda is part of Ryanair and they are the ones that are financing their survival, money is moved around internally. So why isn't Lufthansa financing Austrian Airlines the same way Ryanair is financing Lauda? Why do they need the government to assist them?

It doesn't really matter why or why not. If the government is giving loans out to airlines OS is able to negotiate one, as is FR legally speaking. If FR chooses to not take this option that doesn't mean it is unfair that someone else did.

Blerg wrote:
Of course Lauda employs 1/8 of what OS does but then again, how old is OS and how old is Lauda?

OK and what about it? I'm saying in the current landscape as an employer of Austrians, OS is way more important than Lauda factually speaking. Then add into the fray that many of the Lauda employees are not even under Austrian contracts...

Blerg wrote:
Maybe your answer is there. Furthermore, are you really using the US argument as an advantage just after OS discontinued MIA and downgraded LAX to a summer seasonal destination with fewer frequencies? Seems like the market might not be that big. Makes you wonder how big it would be if you remove transfers.

Convenient of you to mention MIA was being discontinued but omit the fact that it was discontinued in favor of another US station, BOS.
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