Ryanair wins EU court challenges against KLM and TAP state aid
Ryanair has this morning won its legal challenges against billions of euros in state aid paid to two European airlines as a result of the Covid-19 pandemic.
KLM, the Dutch wing of Air France, and Portuguese carrier TAP were granted a combined €4.6bn by the European Commission in response to the crisis in aviation.
However, this morning the EU’s second highest court annulled both decisions due to “inadequate reasoning” as to why the aid was required.
But it also dismissed the budget flier’s challenge to a 10-billion-euro ($12.2 billion) Spanish fund for virus-hit companies.
The KLM and TAP rulings are a win for Ryanair boss Michael O’Leary, who has been an vocal critic of the amount of state aid given out by the EU during the crisis.
Thus far, Ryanair has filed 16 cases against European airlines, including against Lufthansa and Air France.
In a statement, a spokesperson for the Irish carrier said: “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.
“Unless halted by the EU Courts in line with today’s rulings, this State aid spree will distort the market for decades to come. If Europe is to emerge from this crisis with a functioning single market, airlines must be allowed to compete on a level playing field.”
The Luxembourg-based General Court said that the effects of the annulments would be suspended until the Commission makes a new decision on the aid.
The body’s competition authority will examine the findings.
KLM, which got €3.4bn in funding, brushed off this morning’s decision, saying it had “no consequences” for the company.
In its ruling, the Court said that it had rejected as “inadmissable” evidence from the EU as to why KLM had not benefitted from a prior award of €7bn given to its partner Air France.
Unlike their European counterparts, UK-based carriers have not been propped up by their governments through direct aid, although they have made extensive use of business support schemes.
Ryanair has received a £600m loan under the Bank of England’s Covid Corporate Financing Facility (CCFF), as well as €66m from various European payroll support schemes.