Ryanair will contest a €9 billion German government bailout for Lufthansa Group, claiming the award breaches EU competition rules.
Chief executive Michael O’Leary said Germany was ignoring EU treaties to the detriment of poorer countries under the pretext of Covid-19.
O’Leary said the move was "in clear breach of European competition rules" after Lufthansa shareholders approved the deal on Thursday.
Ryanair and O’Leary have been vociferous in their criticism of what the carrier’s outspoken leader has previously described as "state aid doping".
"This, and other bailouts, will have a more devastating long-term effect on the future of European aviation than the pandemic itself," said O’Leary, who said such moves would force smaller rivals out of the market.
"We urge the European Commission to stand by its principles and keep the skies open, fair and competitive," he added.
"If not, the single aviation market the EU has successfully built will crumble, with European consumers and taxpayers paying the price.
"The commission’s approval of the Lufthansa bailout is a betrayal of the core principles of EU law, which we have no alternative but to refer to the EU General Court.”
The European Commission on Thursday confirmed it had approved Germany’s plans to contribute to the recapitalisation of Lufthansa Group.
European commissioner for competition Margrethe Vestager said: "Germany will contribute €6 billion to Lufthansa’s recapitalisation, together with a €3 billion state guarantee on a loan.
"This substantial amount of aid will help Lufthansa weather the current coronavirus crisis, which has hit the airline sector particularly hard.
"But it comes with strings attached, including to ensure the state is sufficiently remunerated, and further measures to limit distortions of competition.
"In particular, Lufthansa has committed to make available slots and additional assets at its Frankfurt and Munich hub airports, where Lufthansa has significant market power.
"This gives competing carriers the chance to enter those markets, ensuring fair prices and increased choice for European consumers.”