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Ryanair calls on EU to block "illegal" €3.4 billion state aid to rival airline

KLM says it is "an unprecedented crisis" due to Covid-19 and that the bailout is necessary to secure its future

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Ryanair’s chief executive Michael O’Leary (Nick Ansell/PA)

Ryanair’s chief executive Michael O’Leary (Nick Ansell/PA)

PA

Ryanair’s chief executive Michael O’Leary (Nick Ansell/PA)

Ryanair has called on the EU Commission to block what it claims is "illegal state aid" of €3.4 billion to KLM.

The financing package was announced by the Dutch government to help its flag carrier survive during the coronavirus pandemic.

Conditions include a requirement for KLM to cut costs by 15pc, improve the airline’s sustainability and reduce the number of night flights it carries out at Amsterdam's Schiphol Airport.

But Ryanair claims the package is "illegal", bad for consumers, and equates to "a subsidy of €200 on behalf of every man, woman and child of Holland".

"For this €200 KLM subsidy, every Dutch man, woman and child could buy five flights with Ryanair, instead of paying for the failure and inefficiency at Air France-KLM," CEO Michael O'Leary said.

KLM is part of the Air-France-KLM group since 2004.

O'Leary also called on the European Commission to block what he termed "subsidy doping" that would reduce competition.

Ryanair has aggressively opposed state rescue packages for European airlines, billing a €9 billion bailout of Lufthansa which gave the German government a 20pc stake as a "waste of taxpayers' money", for example.

However, KLM says it is "an unprecedented crisis" due to Covid-19 and that the financing was necessary to secure its future.

"With the financing package, KLM can continue to fulfil its important social role in economic recovery and sustainability," said CEO Pieter Elbers, who added that it would enable the airline to draw up a restructuring plan and adapt "to the changed economic reality".

“KLM is a strategic asset for the Netherlands, and I’m pleased to have seen the country rally around this national champion during this very challenging period," added Benjamin Smith, CEO of the Air France-KLM Group.

The Dutch state aid to KLM comes in addition to a €7 billion funding package granted by the French State to Air France this May.

The package is subject to parliamentary approval in the Netherlands.

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