RYANAIR and WIZZ Air are challenging government aid to deficient airlines
As of March 2020, the COVID-19 pandemic has landed thousands of aircraft and severely affected aviation and tourism. We can say that it caught on the wrong foot dozens of airlines, which were facing financial problems before the great crisis generated by the new coronavirus. Inevitably, some airlines have ceased to operate in the pandemic, others have called for government support to overcome this crisis.
IATA, travel agencies and airlines have put pressure on world governments to support the two industries with government aid to overcome this difficult period. Even in Romania they were approved state aid and state guarantees for TAROM and Blue Air. Obviously, they were offered on the basis of clauses that the airlines undertook to comply with in order to become profitable and to be able to return the financial aid, where appropriate,
In all this madness, there are two airlines that have been able to survive on the basis of financial reserves and here we are talking about RYANAIR and Wizz Air. At the end of March 2020, Wizz Air had an impressive supply of cash of 1.5 billion EURO.
Wizz Air challenges the state aid offered to Blue Air and TAROM
Ryanair, the largest low-cost airline in Europe, has opened proceedings to cancel the state aid of 16 European companies, and on May 19 recorded its first victories. The EU Court of First Instance upheld two of the actions for annulment, those for aid granted to TAP Portugal and KLM. These are the first decisions that set a precedent. This is after the EU Court rejected Ryanair's appeals against SAS, Finnair and Air France earlier this year.
Ryanair says more than € 30 billion has been granted in the form of state aid to EU companies and that this will distort the market over the next ten years, according to the EU court ruling.
In turn, the air operator Wizz Air disputes the state aid received by TAROM and Blue Air. WizzAir filed its objection to the state aid received by TAROM in January, and a month ago, it did the same in the case of Blue Air.
The two companies also mention in their appeals that many airlines have been flying at a loss for many years, accusing the mismanagement. State aid only prolongs the agony of these companies and "spoils" the market. It is unfair competition from companies that have managed to perform without support from the authorities.
It remains to be seen what will happen in this situation, as there is already a precedent for canceled aid in the case of TAP Air Portugal and KLM.