Ryanair Sues EU to Topple Sweden’s $494 Million Airline Rescue

(Bloomberg) --

Ryanair Holdings Plc asked European Union judges to cancel EU approval of Sweden's 455 million-euro ($494 million) loan guarantees for airlines, the first of several potential lawsuits targeting European governments' efforts to rescue selected airlines hit by a collapse in air traffic.

Ryanair's filing at the EU's General Court on May 1 argues that Sweden violated EU law by limiting state guarantees on loans to airlines that had a Swedish commercial aviation license on Jan. 1, effectively shutting out the Irish carrier and other airlines that operate services in Sweden but base planes elsewhere in Europe.

Ryanair Chief Executive Officer Michael O'Leary accused governments of bailing out their favored airlines and failing to offer the same help to airlines like his and Wizz Air Holdings Plc that are unlikely to receive massive bailout packages from nations where they are licensed.

Ryanair has raised the same concerns over similar French and Danish aid programs. The European Commission said it would defend its decision in court.

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Ryanair said in a statement that Sweden's program discriminates against airlines based outside the country, ignoring “the role of such pan-European airlines in the connectivity” of EU countries that didn't issue their operating license.

The carrier also criticizes the European Commission for failing to do its duty as supervisor of state subsidies to investigate the program properly.

The suit threatens to slow government efforts to shower billions of euros of aid on airlines across the region, after the coronavirus outbreak halted travel. France and the Netherlands have prepared a bailout package for Air France-KLM and Deutsche Lufthansa AG, the region's biggest carrier, is discussing rescue from Germany and other countries. Italy wants to take over Alitalia.

The case is T-238/20 Ryanair vs Commission.