Low-cost airline Ryanair has won a court case against the EU over its approval of the French Government’s €11bn financial aid for Air France and Air France-KLM during the COVID-19 pandemic.
In a joint case with Malta Air, Ryanair said that the approval of the aid in 2020 and 2021 went against EU law by claiming that authorities had not considered the impact of the aid on the French flag carrier and other airlines involved in the Air-France-KLM group including the Netherlands’ KLM.
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The EU General Court ruled with Ryanair and thus annulled the European Commission’s decisions on the French state’s loan guarantee coverage of 90% of a €4bn loan and a shareholder loan of €3bn in 2020, and a recapitalisation of Air France and Air France-KLM for €4bn in 2021.
The court said that the Commission had “erred in defining the beneficiaries of the state aid granted” by excluding the other airlines and the Air France-KLM holding, despite the court saying that links between the companies and the contractual framework meant that the group and KLM “were capable of benefiting” from the advantages of the aid.
Ryanair, which has also filed a number of other challenges to state aid given during the pandemic, described the ruling as a “triumph for fair competition and consumers” which highlighted the Commission’s role in ensuring a level playing field.
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A Ryanair spokesperson said: “Today’s judgments underline the need for the European Commission to immediately act to recover these illegal State aid packages and order remedies to restore at least some of the damage done to competition.
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By GlobalData“Undistorted competition eliminates inefficiency and benefits consumers through low fares and choice. Unjustified subsidies, on the other hand, encourage ineffectiveness and will harm consumers for decades to come.”
Meanwhile, Air France and Air France-KLM said they would be looking at the ruling and deciding whether to file an appeal, though also highlighting that it had already “fulfilled all exit requirements of all state aid.”
In addition to its celebration of the ruling, Ryanair also took the opportunity to point to an alleged lack of action regarding a previous ruling, where the General Court ruled against decisions on similar state aid given to SAS, Lufthansa and airlines in Italy, saying that the Commission had not yet acted to recover the aid.
