Ryanair’s challenge that state aid for Air France and SAS broke European law has been rejected by an EU Court. The General Court of the European Union said that support offered to the airlines by the French and Swedish governments to mitigate the effects of the pandemic was legal.
The French government allowed airlines with a French license to defer payment of taxes, while the Swedish government had offered a loan guarantee scheme to airlines holding a Swedish operating license.
Ryanair argued that over €30 billion in “discriminatory state subsidies” had been “gifted” to flag-carriers across the EU, which the airlines claims would “distort the level playing field in EU aviation for decades to come, giving chronically inefficient national airlines a leg up on their efficient low-fare competitors.”
It had challenged a decision by the European Commission from March 2020 that state aid was permitted “to to make good the damage caused by natural disasters or exceptional occurrences is to be compatible with the internal market.”
Instead, the court agreed that the Covid-19 pandemic, the travel restrictions and lockdown measures did in fact constitute an “exceptional occurence” and that “limiting the deferral of the payment of the taxes to airlines possessing a French licence is appropriate for achieving the objective of making good the damage caused by the exceptional occurrence in question.”
Ryanair said it would appeal the ruling; in a statement it said, “we hope that the Court of Justice will overturn the European Commission’s approvals of the French and Swedish schemes, to give airlines and consumers a glimmer of hope that national politicians obsessed with their flag carriers will be sent back to the drawing board and required to use State aid wisely to assist the recovery of traffic in the post-Covid world instead of bailing out their favoured airline at the expense of fair competition and consumers. Now is the time for the European Commission to stop caving in to national governments’ inefficient bail-out policies and start protecting the single market, Europe’s greatest asset for future economic recovery.”
Air France said in a statement that it has“taken note of today’s judgement and welcomes this decision.”