(94) Ryanair welcomes the Commission’s formal investigation into the recue aid for Estonian Air, in particular in view of Estonian Air’s inefficiency when compared to Ryanair. In relation to measures 1 to 5, Ryanair first notes that Cresco decided to give up its stake which is to be seen as a strong indication that the capital injections were not MEIP-compliant. Ryanair notes that low-cost carriers are a better alternative to national flag carriers such as Estonian Air and that EU law does not recognize the right of each Member State to have a flag carrier. Finally, Ryanair claims that its market position is directly and substantially affected by the State aid to Estonian Air and that this aid strongly distorts competition.

(95) Regarding the restructuring aid opening decision, two interested parties provided comments: an interested party who does not wish its identity to be disclosed and Ryanair.

(96) The interested party who does not wish its identity to be disclosed considers that Estonian Air’s restructuring plan is neither credible nor achievable in view of the fact that its losses in 2012 were extraordinarily high, leading to a net margin below –50 %. As regards the restructuring of the fleet and the operations, the interested party is of the view that Estonian Air’s plans to use two aircraft for charter flights are not viable in view of the very competitive nature of that market and criticises the mix of aircraft of the new fleet. The interested party also notes that the calculation of the profitability of the routes offered as compensatory measures shows that they are not acceptable and comes to the view that, overall, the restructuring aid should not be authorised. Finally, the interested party provides a case study of Hungary’s connectivity after the collapse of Malév and comes to the conclusion that the market can compensate adequately for the loss of a flag carrier.

(97) Ryanair first notes that the Commission should assess whether Estonia had other options available (such as liquidation) rather than providing State aid. Ryanair also claims that the assumptions of the restructuring plan are extremely optimistic and that the plan is doomed to fail. For instance, Ryanair believes that it is unrealistic that Estonian Air will be able to sell some of its aircraft to raise capital. Ryanair also considers that the 12 routes cancelled by Estonian Air are non-profitable and cannot be deemed compensatory measures. Moreover, it notes that the conditions of the 2004 R&R Guidelines are not met, in particular the ‘one time, last time’ principle. Finally, Ryanair reiterates that the aid to Estonia Air harms its market position substantially.

(98) Estonia addressed in detail the arguments raised by the interested parties. As regards the comments of IAG on the rescue aid opening decisions, Estonia notes that Estonian Air and FlyBe do not fly to the same airports and thus are not competing. As regards the connectivity of the country, Estonia considers that it would be affected if Estonian Air exits the market and argues that low-cost carriers do not provide the type of connectivity that is important to Estonia.