Ryanair vs Adria
Ryanair has requested for the European Commission to swiftly act and conclude its investigation into whether Adria Airways accepted state aid and benefits from the Slovenian government to the tune of up to 85.5 million euros from 2007 to 2011, contrary to European Union competition laws. Europe’s largest low cost airline has asked for end to the delays in the Commission’s ruling. In a letter to the Commission from Ryanair’s legal department, the airline says, “State aid was provided to Adria despite its inefficiencies while Ryanair has to develop its own market and is losing revenue”. Ryanair, which has a tense relationship with the Commission, has itself been the subject of investigations for subsidies received from various airports.
The European Commission opened an investigation into Adria’s state aid payout last year. It is expected for a ruling to be made by the end of this year. The Commission is investigating whether one or more of the capital injections within the past four years have procured an economic advantage to Adria Airways over its competitors in the EU Single Market. Latvian flag carrier airBaltic is also under investigation for acquiring state aid. The European Commission can order Adria to pay back the aid it received if it considers the payments from the government to the national carrier were illegal. Last year, both the Hungarian national carrier Malév and the Barcelona based Spanair went bankrupt after the Commission ordered the airlines to pay back state aid received by the Hungarian and regional Catalan governments respectively.
Adria insists it played by the books. Commenting on the issue, the Slovenian carrier has said, “We would like to stress that it is in the interest of Adria to prove that all the measures so far were carried out in accordance with the applicable legislation” Meanwhile, Mark Anžur, who has led the company on a temporary six month basis from January to June has been re-elected as the airline’s CEO. Adria has embarked on an aggressive plan to reduce costs which have so far proved successful as losses have been reduced. Furthermore, recently, Adria’s passenger numbers have begun to rise after over a year of constant reductions.