Two of Europe’s largest airlines, the low-cost Dublin-based Ryanair and Germany’s Lufthansa have got themselves into a very public and particularly nasty spat over Laudamotion – a little known Austrian airline in which Ryanair has acquired a 75% stake in.
This all goes back to the collapse of airberlin last year when the Etihad Aviation Group withdrew funding from the beleaguered German carrier. At the time, airberlin had a significant stake in the Austrian leisure carrier, Niki and it too soon fell into administration.
While airberlin was forced to ground its planes immediately, Niki was able to continue flying as a buyer for the airline was found. Both IAG and Lufthansa – two heavyweights in the European aviation industry put in bids for Niki but administrators eventually sold the airline onto a company owned by Niki Lauda – a former F1 racing driver who originally founded his namesake airline.
Niki was rebranded as Laudamotion and soon after Ryanair announced a deal to acquire a 75% stake in the new airline. Under the deal, Ryanair would initially buy a 24.9% stake and fund Laudamotion to the tune of €50million in its first year of operation. Ryanair also planned to provide 6-wet lease aircraft for the airline to operate a 21-aircraft schedule.
The deal had to be approved by the European Commission and today, it did exactly that. A cause for celebration you might think but Ryanair used the opportunity to throw a series of allegations at Lufthansa.
You see, Lufthansa had managed to buy what remained of airberlin but only after it made concessions to competition regulators who were concerned the airline would have too much of a stranglehold in the German and Austrian markets if it went unchecked.
What is Ryanair accusing Lufthansa of?
As part of the agreement with regulators, Lufthansa would lease 11 aircraft to Laudamotion but according to Ryanair, that hasn’t yet happened – at least fully.
Ryanair claims Lufthansa has so far delivered 9 out of the 11 aircraft promised and that the German carrier is now withholding €1.5million in wet-lease payments that it owed Laudamotion who have been filling in some Lufthansa flights over the summer.
Lufthansa though wasn’t having any of it. Earlier today, the airline took the unusual step of directly rebutting Ryanair’s allegation in a public press release:
How did Lufthansa respond?
“Lufthansa has fully complied with all EU Commission obligations regarding the required transfer of aircraft to Laudamotion. This is true of both the number of aircraft involved and their leasing terms,” the statement read.
“All the aircraft covered by the EU derogation decision were offered for sale to Laudamotion by Lufthansa. Laudamotion rejected this offer, preferring to lease the aircraft instead. Laudamotion has recently failed – repeatedly – to meet its contractually-agreed lease payment obligations.” Ouch!
Now, Lufthansa says it has terminated the lease agreements on those nine aircraft because of Laudamotions failure to pay its lease payments.
So who’s teling the truth?
Not so, says Ryanair who very quickly put out yet another statement accusing Lufthansa of using “every tactic in the book to harm and damage Laudamotion.” They accuse Lufthansa of lying and even leasing the aircraft at a “substantially higher” market rate.
It will be interesting to see where this spat now goes. And don’t forget, IAG has just entered the Austrian with its own short-haul version of the LEVEL brand – things could soon get very tricky for Laudamotion.