Ryanair suing European Commission over Lufthansa

LONDON (Reuters) - Irish budget airline Ryanair RYA.I said on Wednesday it was suing the European Commission for failing to investigate an arrangement between Munich airport and Germany's Lufthansa LHAG.DE.

“Lufthansa is ... receiving substantial state aid at Munich airport, which distorts competition,” Ryanair Chief Executive Michael O’Leary said. “Ryanair has been left with no alternative but to challenge the Commission’s inaction.”

At issue is aid for the construction of Munich airport’s Terminal 2, the Commission said in Brussels. It said Munich airport and Lufthansa were involved in a public-private partnership, which had been the subject of two years of correspondence between the Commission and German authorities.

“The Commission is examining any possible advantage given in the context of a state aid investigation into the provision and operation of the Munich airport Terminal 2,” it said in a statement.

“Inquiries in relation to this case are already at an advanced stage,” it said.

Europe's biggest low-cost carrier said in July it planned to sue the Commission for not taking action against governments it believes are giving illegal state aid to national flag carriers such as Air France, Lufthansa, Alitalia AZPIa.MI and Olympic Airways.

Last week, Ryanair said it would sue the European Commission for not tackling the French government over reduced domestic airport charges which the airline believes favour Air France AIRF.PA.

The group also lodged a complaint last month with European Union Competition Commissioner Neelie Kroes accusing rivals Deutsche Lufthansa and Air France of price fixing of fuel surcharges, an accusation both companies deny.

Reporting by Pete Harrison; additional reporting by David Lawsky in Brussels, editing by Richard Hubbard