Ryanair and Lufthansa in row over Laudamotion aircraft

German airline says Laudamotion failed to make lease payments, Ryanair says Lufthansa owes Laudamotion €1.5m

Niki Lauda and Ryanair chief executive Michael O’Leary in Vienna on March 28th to announce their plans for Laudamotion. Photograph: Photograph: Heinz-Peter Bader/Reuters

Niki Lauda and Ryanair chief executive Michael O’Leary in Vienna on March 28th to announce their plans for Laudamotion. Photograph: Photograph: Heinz-Peter Bader/Reuters

 

German airline Lufthansa and Austrian rival Laudamotion – soon to be controlled by Irish carrier Ryanair – are heading for court in a row over aircraft leases.

EU regulators this week approved Ryanair’s bid for 75 per cent of Laudamotion, founded by triple Formula One champion Niki Lauda, provoking a clash between the Irish airline and Lufthansa.

The German group says that Laudamotion has failed to make lease payments for aircraft it transferred to the airline.

However, Ryanair says Lufthansa owes Laudamotion €1.5 million and is wrongfully trying to take back nine planes that the German player leased to the company.

A Lufthansa spokesman said on Friday that the dispute over the leases with Laudamotion was due before the British high court in London next week. The airlines agreed the leases under English law, a normal practice in the industry.

The dispute is rooted in Lufthansa’s take over of the insolvent Air Berlin, which had previously bought Laudamotion from Mr Lauda and sold the assets back to him in January.

Condition

The European Commission required Lufthansa to transfer 11 craft to Laudamotion as a condition of allowing it take over Air Berlin.

Ryanair claims Lufthansa is in breach of this provision as it only provided nine of the 11 Airbus A320s due to Laudamotion, and is delaying on delivering the other two and overcharges for the craft.

The Irish group also maintains that Lufthansa has failed to pay €1.5 million due to Laudamotion for operating flights on the German airline’s behalf, a practice known as wet leasing.

Lufthansa issued a statement saying that it had fully complied with the European Commission’s ruling. It argued that Laudamotion opted to lease rather than buy the craft and had failed to make payments due on them. As result, it was exercising its right to take the planes back.

Untrue

Ryanair said this was untrue. Juliusz Komorek, its chief legal officer, accused Lufthansa of abusing its dominant position in the German and Austrian air travel markets.

“Lufthansa’s attempt to terminate Laudamotion’s nine aircraft leases during the peak of the summer period, at a time which would cause maximum damage to Laudamotion and its customers, is in breach of its obligations to the EU,” he said.