State aid: Ryanair wins rare EU court victory in Luxembourg

State aid: Ryanair wins rare EU court victory in Luxembourg
© Ryanair

Irish low-cost airline Ryanair has won its case to fight state aid granted by the Dutch government to KLM, and in a separate case, the state aid given by Portugal to TAP.

The case was heard before the General Court, the second-highest judicial forum in Europe, below the European Court of Justice.

Last year the European Commission gave the go-ahead to a bailout worth €3.4 billion to KLM, now owned by Air France, and of €1.2 billion for Transportes Aereos Portugueses (TAP).

Ryanair has carried out a long-running campaign against state aid to national airlines, which it sees as unfair competition. Ryanair itself benefits from generous subsidies and grants, for example in return for reviving moribund airport like Gosselies in Charleroi, now renamed Brussels South.

However, successful court battles have been scarce. And the decision handed down yesterday is a victory on paper rather than working reality.

The General Court annuls the Commission’s decision to approve the Netherlands financial aid for the airline KLM amid the COVID-19 pandemic on the grounds of inadequate reasoning,” the Court said. It also pronounced the same verdict in the case of Portugal and TAP.

However, the court also suspended its own judgements – including the cancellation of the aid and the order to repay – to allow the Commission to adjust its reasoning.

Ryanair has the right to challenge that decision, but before the same court that made it.

The European Commission’s approvals of state aid to Air France-KLM and TAP went against the fundamental principles of EU law and reversed the clock on the process of liberalisation in air transport by rewarding inefficiency and encouraging unfair competition,” Ryanair said after the ruling.

In two other cases yesterday, the court rejected Ryanair’s challenge to a Spanish fund worth €10 billion for companies hit by the coronavirus. And it backed Lufthansa’s challenge to a 2017 Commission decision allowing state aid to the Frankfurt Hahn airport – aid that principally benefited Ryanair.

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