The Irish airline Ryanair has accused Lufthansa and Air France-KLM of trying, through the European Network Airlines Association, to suspend its flights and question its license to operate in the European Union. The association has filed a lawsuit in the High Court of Ireland over the ownership structure and control of the carrier.
“They have now approached the High Court of Ireland with a request to have our license suspended and Ryanair flights terminated“, said the company's CEO Michael O'Leary, quoted by “Politico“.
The dispute is related to EU rules, according to which airlines with a European license must be majority-owned and effectively controlled by citizens or entities of the European Union. The European Network Airlines Association claims that Ryanair no longer meets these requirements.
The dispute is over the share of European shareholders
As an argument, the association cites information provided by Ryanair itself, according to which EU citizens own only 30 percent of the company's shares. The share is below the 50 percent threshold, which is related to the requirement for European ownership. Michael O'Leary owns 4 percent of the shares.
Ryanair denies the accusations. The company claims that shareholders from non-EU countries do not have voting rights and therefore the carrier remains under European control. In a statement, the airline described the legal proceedings as an attempt to limit competition and passenger choice in the EU.
The European association told Politico that it had been calling on EU and Irish aviation authorities for months to check whether Ryanair was complying with ownership and control rules. After the Irish Civil Aviation Authority failed to intervene, the association said the matter was taken to court.
License withdrawal not imminent
Ryanair will not automatically lose its license as a result of the case. That could only happen if the court ruled against the company and it failed to comply.
Augusto Viansson Ponte of consultancy Alton Aviation Consultancy described a license withdrawal as unlikely, but said the association's claim was well-founded enough to be considered. "It is still too early to say that Ryanair is breaking the rules," he said.
According to him, in the event of an unfavorable decision, the airline could limit share purchases by investors outside the EU, encourage the transfer of shares to European investors, buy back some of its shares or restructure licensed subsidiaries.