O'Leary condemns state aid to airlines

European airlines that are looking for state aid were "basket cases" before the events of September 11 and should not receive…

European airlines that are looking for state aid were "basket cases" before the events of September 11 and should not receive subsidies, Mr Michael O'Leary, chief executive of budget airline Ryanair said today.

Ryanair has objected to the European Commission about Belgium's plans to arrange a bridge loan for its ailing airline Sabena.

"There is absolutely no reason why these airlines should be getting state aid. The ones who are looking for it were basket cases before September 11 and they will be basket cases long after it," Mr O'Leary said.

"This is a bankrupt company. Let it go bankrupt. It deserves to be bankrupt," he added. "Any other company in any other country in any other industry that lost money for 39 out of 40 years - there wouldn't be any question of rescuing it. Sabena is beyond rescue."

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Mr O'Leary said he expected that in two or three years there would be three or four very large connecting carriers dominating the European airline market.

He expected these to be alliances dominated by British Airways, Air France and Lufthansa.

"The second-tier carriers like Aer Lingus, KLM, Sabena and Alitalia will all be part of that, either as subsidiaries of, or feeders of, them.

"There will be significant retrenchments and cutbacks. Loss-making operations will be cut out," he told RTE radio.

Mr O'Leary was also critical about suggestions Aer Lingus should get state cash.

Aer Lingus is currently drawing up a rescue plan and has announced a 25-percent cut in operations.

Bookings are down 40 percent and Mr O'Leary claimed Aer Lingus was doing "absolutely nothing" to lower fares or stimulate traffic.

"They are sitting there with the business suffering, waiting for subsidies. It is crazy."