Ryanair to challenge TAP restructuring in Brussels

  • ECO News
  • 6 September 2021

The Irish company will respond to the European Commission's in-depth investigation and promises legal action if the restructuring plan is approved.

With the opening of an in-depth investigation into TAP’s state aid, interested parties can send their arguments to the Directorate-General for Competition in Brussels. Ryanair guarantees it will send a reply. EasyJet, although it is following the issue, had not, until Friday, submitted any comment.

“Ryanair will contest TAP’s restructuring plan and will send comments to the European Commission, which has already expressed doubts about TAP’s plan,” the Irish airline replied to ECO.

And it goes further. The company led by Michael O’Leary guarantees that it will “appeal against any European Union decision approving the plan, as it is discriminatory and rewards TAP for years of losses and financial mismanagement.”

ECO also questioned EasyJet, which said that as of last Friday it had not submitted any official argument, adding, however, that it “continues to follow developments on the issue with interest to ensure that the market and competition in Portugal are not distorted”.

Stakeholders had one month to comment on TAP’s restructuring plan, which involves state aid of €3.2 billion, after the decision was published in the EU’s Official Journal, which happened on August 6. The deadline will thus end this Monday.

Ryanair has been very critical of TAP’s state aid since the beginning of the process, having appealed to the General Court of the European Union, challenging the first transfer of €1.2 billion, made as recently as 2020. The judges ruled in favour of the airline, considering that the process was not sufficiently sustained. The authorisation for the injection was annulled, forcing Brussels to re-adopt it.

It was in this context that the European Commission opened an in-depth investigation, urging the government to amend the proposed plan in order to bring it more into line with the rules on state aid, particularly regarding the company’s own contribution to the restructuring effort, which it estimated at 36%, too far from the 50% required.

Ryanair has since filed a new appeal with the European court at the beginning of August against the €462 million injected into TAP this year, according to Público. Less than a fortnight ago, CEO Michael O’Leary once again criticised the Portuguese airline, accusing it of “blocking” slots at Humberto Delgado airport, calling for intervention from the European Commission and the government. “If these slots are released, we will invest more in Portugal and tourism will recover faster,” he said.

In its response to ECO, the Irish company added that it “will continue to fight for a level playing field for businesses that are creating jobs and bringing millions of visitors to Portugal.”