Ryanair has filed a second complaint with the EU Competition and Transport Commissioners alleging "dirty tricks" by German airline Lufthansa. Ryanair alleges Lufthansa is trying to prevent it from "exercising its right to freedom of speech in Germany".
Maintaining Lufthansa was "running scared of Ryanair" following its move to open a new continental European hub at Germany's Frankfurt-Hahn airport, Ryanair chief executive Mr Michael O'Leary alleged Lufthansa was now trying to stop his company speaking out through press releases. Ryanair is expected to open for business in Frankfurt-Hahn in just over a month, competing directly with Lufthansa.
But Commission sources said Ryanair's complaints about alleged attempts to muzzle its advertising and press statements were matters for the German courts rather than the European Commission.
"It seems the complaint concerns regulations for adverts in Germany and therefore seems rather a case for German courts than the European Commission," according to a Commission source.
Lufthansa maintains Ryanair's advertisements for its new service are "misleading" about fares while Ryanair has accused Lufthansa of "dirty tricks". The latest complaint by Ryanair follows legal action by Lufthansa against Ryanair in November, when the German airline took out a temporary injunction from a regional court near Cologne stopping certain Ryanair advertising practices.
At that time, Ryanair lodged a complaint with the EU Competition Commissioner alleging Lufthansa was trying to block its attempts to advertise its new low-fare service. Lufthansa objected to a Ryanair press release at the time, which referred to "dirty tricks" by the German airline.
Ryanair shares fell almost 3 per cent in early trading yesterday from Tuesday's €6.87 close following a downgrade by British broker Morgan Stanley. The shares later recovered some of the loss to close at €6.73. Morgan Stanley cut its investment ratings on Ryanair and EasyJet from outperform to neutral. Ryanair was downgraded because the shares had already overshot Morgan Stanley's €6.80 share price target. "This is a pure valuation call," the broker said in a research note, adding that it did not change its positive long-term stance on Ryanair.
At the €6.80 level, Ryanair shares had hit fair value, according to a research note by analyst Mr Martin Borghetto. He did not see "the opportunity to raise our earnings growth forecast for the current and prospective financial years of 25 per cent and 23 per cent respectively in order to justify a substantial increase in our price target for Ryanair" at the moment, he said.
But Ryanair remained "the pre-eminent low-fares operation in Europe", he said, recommending longer-term focused investors to use any weakness in the share price "to chase the stock". Near-term earnings momentum should partially depend on the success of new services from the new Ryanair base at Frankfurt-Hahn, according to Mr Borghetto.
Morgan Stanley also cut its rating on EasyJet because the shares had overshot the broker's 450p sterling price target. But it set a new price target of 520p for EasyJet, stating the carrier should benefit from new route opportunities out of primary airports abandoned by weakened European mainline carriers.
