According to an article published on Bloomberg, Ryanair is set to increase its cash position with an additional $726 million loan funded by the UK government through the government’s coronavirus relief program. This relief, backed by the Bank of England is available to any companies in any industry spanning from retail to construction to airlines themselves as long as a certain investment credit rating criterion is met.
Ryanair falls into this eligible category and is set to increase its cash reserves to $4.4 billion (€4.1 billion).
This news comes on the back of Michael O’Leary, Ryanair CEO adamantly pursuing legal action earlier this month against the state-aided bailouts prescribed by the German, French and Italian governments for legacy airlines such as Lufthansa (LHAB) (LHA) , Air France and Alitalia, titling them as unfair support for favoured but inefficient national carriers which could potentially distort the dynamics of the industry for other competitors.
In an interview on Bloomberg when asked on his position concerning airlines turning to government loan schemes or running to state-aided bailouts the CEO commented saying, “Most airlines across Europe are engaged in payroll support schemes. We are supportive of those state-aids that are transparent and are made available to all companies and competitors equally such as the UK loan scheme. We qualify for the UK loan scheme because we are the largest passenger carrier in the UK, and we have a ‘Triple B’ credit rating.”
The CEO further went on to reiterate that what Ryanair is opposed to is the “illegal state aid” prescribed to airlines such as Lufthansa (LHAB) (LHA) , Air France and nationalized Alitalia without any correlating support to the other airlines operating in those very same markets. “The French are refunding French taxes to Air France but not to EasyJet, Ryanair or British Airways who also operate in France. What we are calling for is an end to those illegal discriminatory state aids and by all means, confine the industry to payroll supports and government loans that are made available to all airlines operating in those economies,” commented Michael O’Leary.