ARC NEWS
​EU court annuls approvals of state aid to Lufthansa and SAS
May 11, 2023
The EU General Court has annulled a pandemic-era decision by the European Commission to approve billions of euros in state aid to Lufthansa and SAS, following legal challenges bought by Ryanair and Condor. Lufthansa was provided with €6 billion ($6.6 billion) in state assistance as it was roiled by the Covid-19 pandemic in mid-2020, action through which the German state briefly took a roughly 20% stake in the company. In approving Germany's aid to Lufthansa, the Commission committed "several errors", the court has ruled, citing a failure to ensure the airline was unable to secure financing from the markets, a failure to require that Germany's shareholding be paid back as soon as possible, denial that Lufthansa had market power at some airports, and acceptance of some actions by the airline that did not ensure strong competition. "In the light of all of the foregoing, the General Court finds that the contested decision, as corrected, is vitiated by several errors and irregularities and, in consequence, it annuls that decision," it states. Lufthansa says it will analyse the ruling before deciding on its next steps, and notes that the financial support measures were "already terminated before today's ruling". It adds that the German government made around €1 billion in proceeds from the sale of its stake. The company can appeal the decision to the European Court of Justice. The General Court has also found that the decision regarding SAS failed to properly incentivise the airline to fully release itself from state ownership or examine alternatives to equity investments, following a challenge brought solely by Ryanair. SAS was provided with around €1 billion by the governments of Denmark and Sweden. It is unclear what the implications are for the group, especially given that it is currently under bankruptcy protection in the USA. SAS has been approached for comment. Ryanair has welcomed the decision, saying that the German, Swedish and Danish governments "rushed through" a "discriminatory subsidy scheme". It adds: "Today's judgments confirm that the Commission must act as a guardian of the level playing field in air transport and cannot sign off discriminatory state aid under political pressure by national governments. The Court's intervention is a triumph for fair competition and consumers across the EU." Stating its belief that European governments provided €40 billion in aid to carriers through the pandemic, Ryanair asserts: "This state-aid spree will distort the market for decades to come. Europe's emergence from the Covid-19 crisis with a functioning single market depends on airlines being allowed to compete on a level playing field."


Transat has eight A321neo aircraft on order
May 10, 2023
Ryanair Group has placed a firm order for 150 Boeing 737 Max 10 narrowbodies for delivery between 2027 and 2033, and taken options on a further 150. The low-cost carrier says the deal has a list-price value of $40 billion, making it the largest order ever placed by an Irish company for US-manufactured goods. "Ryanair is pleased to sign this record aircraft order for up to 300 Max 10s with our aircraft partner Boeing," states group chief executive Michael O'Leary. "These new, fuel-efficient, greener-technology aircraft offer 21% more seats, burn 20% less fuel and are 50% quieter than our 737NGs." The group expect that the aircraft will enable revenue and traffic growth across Europe as it targets 300 million passengers annually by 2034, up from 168 million in the financial year to end-March 2023. "The extra seats, lower fuel burn and more competitive aircraft pricing, supported by our strong balance sheet, will widen the cost gap between Ryanair and competitor EU airlines for many years to come, making the Boeing Max 10 the ideal growth aircraft order for Ryanair, our passengers, our people and our shareholders," adds O'Leary. Ryanair Group currently operates 164 of the 197-seat Max 8, having ordered 210, as well as 737NGs. Boeing last month disclosed delays to Max deliveries, having received notification of a manufacturing issue from a supplier. Yet Ryanair has been known to covet an order for the Max 10 to enable expansion through the second half of this decade and into the next. O'Leary told Cirium in late March that negotiations with Boeing on the Max 10 were “going slowly” but that a deal was in sight as both sides had moved on pricing. The new aircraft will be configured with 228 seats, 21% more than the Boeing 737NG. Half of the order is designed to replace this older aircraft type, with the remainder allowing expansion. With the first Max 10 set to arrive in 2027, there will be a roughly two-year gap following delivery of Ryanair's final Max 8, scheduled for 2025. Capital expenditure for the deal will mainly stem from cash flow, Ryanair states, although it will remain "opportunistic" in its fleet financing strategy. "The Boeing-Ryanair partnership is one of the most productive in commercial aviation history, enabling both companies to succeed and expand affordable travel to hundreds of millions of people," states the US airframer's chief executive Dave Calhoun. "Nearly a quarter century after our companies signed our first direct airplane purchase, this landmark deal will further strengthen our partnership. We are committed to delivering for Ryanair and helping Europe's largest airline group achieve its goals by offering its customers the lowest fares in Europe." The transaction requires approval at Ryanair Group's annual general meeting on 14 September, and will not contribute towards Boeing's orders and deliveries tally until it is finalised.


Air New Zealand returns last 777-300ER from storage
May 10, 2023
Air New Zealand's last of seven Boeing 777-300ERs to be reactivated from storage will enter service on 13 May, helping to boost the resilience of its network. The aircraft, registered ZK-OKM (MSN 38405), is one of four 777-300ERs that the airline stored in Victorville, California, and has undergone a seven-week process to prepare it to ferry back to the airline's Auckland base. "Having all of our 777-300s back will help build more resilience and more seats into our international operation, meaning we can fly more customers to where they need to go - whether that's San Francisco, Honolulu, Houston or Tahiti," says chief operations officer Alex Marren. Fleets data shows that the aircraft was stored in Victorville in November 2020, and in April ferried to Singapore Changi airport, likely for its return to service maintenance. Networks data shows that Air New Zealand mostly uses its 777-300ERs on services to Los Angeles, Houston, San Francisco, Papeete, Apia, Melbourne, Brisbane and Sydney.



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