Ryanair Pledges to Contest Germany's ‘Illegal’ Aid Package for Lufthansa

The airline's statement comes as Lufthansa and the German government have agreed on a $9.8 billion relief package for the carrier to deal with the repercussions of the coronavirus pandemic on air travel.

Ryanair intends to challenge the "illegal" state rescue package for Lufthansa in court, the carrier's Chief Executive Michael O'Leary said on Tuesday. According to the top manager, the aid will allow the German airline to "engage in below-cost selling".

"Ryanair will appeal against this latest example of illegal state aid to Lufthansa, which will massively distort competition", O'Leary said.

Lufthansa has preliminarily secured a $9.8 billion bailout deal with the German government amid a slump in air travel caused by pandemic-related restrictions. Berlin is expected to buy a 20% stake in the company which it intends to sell in 2023.

The agreement will stipulate a waiver of future dividend payments and a cap on management pay. Additionally, government officials will be allowed to occupy two positions in the Supervisory Board of the company.

The shareholders and the European Commission are yet to approve the deal.