It isn’t just U.S. airlines being petty! Ryanair protests Air Berlin bankruptcy with the EU.
Why can’t airlines just get along? Here in the U.S., you have the Big 3 saying nasty things about the Middle East Big 3. The beef there, of course, is over competitive advantages due to government subsidies. And the irony in all that is that the U.S. Big 3 are a bunch of hypocrites.
Air Berlin Files for Bankruptcy
Anyway, this past Tuesday Air Berlin filed for bankruptcy in Germany. This decision came as majority shareholder, Etihad, stated they’d no longer provide financial assistance to the airline. However, to avoid stranding thousands of passengers, the German government has decided to step-in and provide Air Berlin loans.
Ryanair’s Issue with Air Berlin’s Bankruptcy
The reason Ryanair is protesting Air Berlin’s bankruptcy is because of the way the German government is handling it. Usually, when airlines file for bankruptcy in Germany, they must cease operations immediately. But in this case, the government is allowing the airline to continue its operations. The part that really upsets Ryanair, though, is the loan. In fact, the airline is accusing the German government of conspiring to prop up Air Berlin until a new owner can rescue the airline.
Ryanair Protests Air Berlin Bankruptcy – My Take
I understand Ryanair’s position; government assistance is unfair. But the German government has a good argument too. Air Berlin is the country’s second largest airline behind Lufthansa. And the airline carries around 80,000 passengers per day. That’s a lot of people to leave stranded. Aloha Airlines’ sudden termination of service was we messy enough, and Aloha didn’t carry anywhere near that many passengers.
Also, I wonder how much passengers actually cross-shop the two airlines. I flew Air Berlin four years ago and liked it quite a bit. I likened the experience to that of Southwest, except Air Berlin charges for checked bags and offers hot meals for purchase. Ryanair, on the other hand, reminds me more of Spirit, albeit with way more problems.
it’s obvious to see how the German govt wants nothing to do with Ryanair – where were they when AirBerlin wanted support before? Laughing at the AB doomsday countdown clock while contemplating how to eventually charge a toilet fee ??
LH took the initiative to wet lease capacity from AB to offload some of their burden (even though it still wasn’t enough in the end), so I see nothing wrong with LH getting first dibs.
EEA is a fully integrated and open aviation market so if Ryanair wants to bring in some competition, they can do it anytime, anyday, and doesn’t have to depend on the CDU doling out AB remnants like candy.
henry LAX, I almost forgot about that ludicrous toilet fee proposal! And I agree with all your points. That’s why I’m certain that Ryanair is just trying to stir controversy again to distract from its own issues.
I love bashing ULCC’s as much as the next guy (and yet still use them due to their price, also like most people), but we need to be objective here. Failing or not, AB is a private enterprise. Taking public tax dollars to prop up a private business should never be taken lightly. I’m not saying it should never be done no matter what, but rather it should only be done when dire, sustained, nationwide consequences are in the offing, and there is good reason to believe that the airline will be able to continue as a going concern indefinitely.
In this case, this is not Germany’s reason for the loan. It’s stated reason is to not strand holiday travelers. The government doesn’t even pretend to think that AB will survive as a corporate entity as a result of this loan.
Is getting people home from vacation really a valid reason for the government to burn tax dollars? Isn’t this what travel insurance is for? It’ absolutely true that artificially postponing the natural death of AB necessarily impedes other carriers from being able to compete for business which otherwise would be available.
I’m no big fan of Ryanair, but we should consider the arguments being made rather than the person who is making the argument.