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Ryanair lodges complaint over Air Berlin bankruptcy

August 16, 2017

Irish carrier Ryanair has filed complaints with German and EU competition agencies over Air Berlin's bankruptcy. They have accused the German government of helping prepare a Lufthansa takeover, violating anti-trust laws.

https://p.dw.com/p/2iIdn
Two Air Berlin and Ryanair planes parked on the tarmac at Hamburg Airport
Image: picture-alliance/dpa/D. Bockwoldt

Following the announcement that Air Berlin filed for bankruptcy protection, low-cost rival Ryanair lodged complaints with European and German competition agencies, the company said in a statement.

The Irish budget carrier said an "obvious conspiracy" was playing out between the German government, Lufthansa and Air Berlin to divide the airline's assets "while excluding major competitors."

"This manufactured insolvency is clearly being set up to allow Lufthansa to take over a debt-free Air Berlin, which will be in breach of all known German and EU competition rules," Ryanair said in a statement posted on their website.

The airline implored the European Commission to take "immediate and decisive action" on the issue.

The German government has granted a bridge loan on 150 million euros ($176 million) to ensure Air Berlin flights will continue according to schedule for the next three months. The plan will also secure the jobs of Air Berlin's 7,200 workers in Germany while the negotiations take place.

Read more: Opinion - Air Berlin's turbulent journey

Germany calls allegations 'absurd'

Germany's deputy economy minister Matthias Machnig defended the actions of the German government and rejected Ryanair's allegations on Wednesday.

"This is an absurd theory," Machnig told ZDF breakfast show Morgenmagazin. He noted that since Air Berlin will be sold off in bits, no single airline will completely take over the company.

Machnig also said the German government's decision to grant a bridge loan was the right move since there wouldn't have been enough capacity to fly home thousands of vacationing Air Berlin customers on short notice.

Read more: Air Berlin passengers asked to wear life jackets on flight to Venice

EU state aid rules allow governments to extend rescue and restructuring aid to companies that are in financial difficulty, but such assistance is subject to strict conditions.

Air Berlin, Germany's second-largest airline, made a net loss almost every year since 2008 and reported a deficit of 783 million euros ($915 million) in 2016.

The budget airline has depended on cash infusions from key shareholder Etihad Airways, an Abu Dhabi-based carrier, for many years.

Air Berlin embarked on a massive restructuring plan last September that included renting 38 aircraft with crew to Lufthansa and slashing 1,200 jobs - around one seventh of its workforce.

During the restructuring, the airline experienced a series of severe delays and flight cancellations, leading to a massive drop in customers.

rs/kms (dpa, Reuters)