Ryanair lobbies for government aid to airlines

Ryanair lobbies for government aid to airlines

Ryanair has made an unprecedented alliance with full-frills carriers Emirates and Etihad Airways to lobby for an extension of government credit to airlines.


The budget carrier is among the leading members of a group of 10 airlines calling themselves the Aviation Alliance, announced today, which is demanding an overhaul of Export Credit rules.


The move represents a U-turn by Ryanair boss Michael O’Leary who spends much of his time attacking governments, bureaucracy and other airlines.


The Aviation Alliance wants no limit on the amount of export credits extended to airlines, no increase in the fees for credit and no reduction in the proportion of the cost of an aircraft that can be financed.


The US and leading European Union governments, including the UK, offer credit to overseas purchasers of expensive technology and infrastructure, including aircraft, to encourage exports. Most overseas airlines take advantage of these export credits to buy Airbus and Boeing aircraft.


However, carriers in Europe and the US cannot access the credit under an agreement between Brussels and Washington, as this would be deemed state aid.


British Airways boss Willie Walsh recently denounced the practice, arguing the expansion of Emirates and other Middle East airlines was being subsidised by tax payers. BA, Lufthansa, Air France-KLM and leading US carriers are lobbying their governments and Brussels for a change.


Now the Aviation Alliance carriers have written to UK chancellor George Osborne, US Treasury secretary Tim Geithner and the finance ministers of Germany and France to demand unlimited credit be extended to all carriers regardless of state aid rules.


Ryanair chief financial officer Howard Millar said: “Export credit financing is essential to the continued growth of the aviation industry.”


The alliance argues export credits are not cheap and “very few of the airlines who have utilised the guarantees have defaulted”. The letter from the 10 airlines states: “A very significant proportion of the 2,000 aircraft deliveries in 2009 and 2010 would not have been made without export credit financing.”


The Aviation Alliance is made of Ryanair, Emirates, Etihad, Korean Air, Norwegian, Oman Air, Pegasus, Virgin Blue, Wizz Air and Cargolux.


Ryanair has been by far the fastest-growing airline in the world over the past decade and Emirates has more than 200 aircraft on order, worth $71 billion.

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