Ryanair calls for common sense not state aid

Ryanair, one of Europe’s leading budget airlines, has spoken out about the need for smart economic strategies rather than state aid as the solution to the current crisis facing the airline industry.

Speaking to the BBC, Ryanair’s Chief Executive Michael O’Leary said that it was inevitable that the industry would report extensive job losses in the wake of the recent terror attacks, as such redundancies had been in the pipeline long before last week’s events. Commenting on the suggestion that the major airlines were therefore using the situation to their financial advantage, Mr O’Leary said he believed that was a correct assessment of the true nature of their appeals for state aid.

Numerous leading airlines have announced thousands of job losses, with several smaller firms filing for bankruptcy. Virgin Atlantic, the UK’s second largest long haul airline, has announced that it is to shed 1,200 jobs - 13 per cent of its workforce – while British Airways has confirmed that it is to make 5,200 more staff redundant, following the 1,800 job losses already announced by the company in the past fortnight.

The bosses of both companies have called on the UK government to give financial support to the airlines, and discussions to offer financial aid packages are already underway in the US and the European Union. The British Airline Pilots Association (BALPA), which represents almost all Britain’s airline pilots, said the UK government should give financial support to the airlines, while US airlines have requested $24bn in financial aid from the American government.

Current EU legislation dictates that airlines cannot receive financial help if they have previously received such aid in the past. However, in the light of the $5 billion aid package proposed by President Bush for the US airline industry, the EU has conceded that European firms should not “put at a disadvantage” in comparison to American airlines.

However, Mr O’Leary dismissed the appeals of the airlines as ‘begging’ and described any decision to provide state aid to loss-making airlines as ‘not justifiable’ by the impact of recent events. (CL)