Low-cost airlines Ryanair and Malta Air have emerged victorious in a court case against the European Union’s decision to approve billions of euros in state aid to Air France and holding company Air France-KLM. The aid was granted during the COVID-19 pandemic as a measure to support the struggling airline industry.
Ryanair has been actively challenging various measures implemented by EU countries to aid airlines affected by coronavirus restrictions. As per regulations, the European Commission must grant approval for financial support provided by member countries to companies. Many European nations sought this approval in an effort to prevent the collapse of their airlines during the pandemic.
The European Commission did not object to either of these aid measures.
However, the European General Court ruled that the Air France-KLM holding and KLM could indirectly benefit from the state aid provided, and thus annulled the decisions made by the European Commission.
The court emphasized that when there is a possibility of competition distortion due to the accumulation of state aid within the same group, it is the responsibility of the European Commission to diligently examine the links between the companies involved.
It is important to note that this ruling can be appealed.
Furthermore, the European Commission, which acts as the EU’s anti-trust watchdog, relaxed its policies during the pandemic as travel restrictions brought the industry to a standstill. It approved billions of euros in support for national flag carriers through a fast-track system established to address this unprecedented crisis. In total, approximately 3 trillion euros in state support was approved across all sectors in EU member nations. Ryanair estimates that the airline sector alone received 40 billion euros in financial aid.