The European Union’s General Court has ruled against separate challenges from Ryanair (FR, Dublin International) that the state aid Alitalia and Brussels Airlines (SN, Brussels National) received in 2020 during the Covid-19 pandemic was compatible with the bloc’s internal market.

In separate judgements handed down on October 18, the court in Luxembourg dismissed the legal action the Irish carrier brought and ordered it to bear its own costs and pay those incurred by the European Commission.

Alitalia benefited from two individual aid measures amounting to EUR199.45 million euros (USD236 million at the time) in relation to the period March 1 to 15 June 15, 2020, which the European Commission approved that September; and EUR73.02 million (USD90.5 million at the time) covering June 16 to October 31, which the antitrust regulator gave its nod to in late December 2020.

Without opening the formal examination procedure for state aid, the commission considered that the measures in question constituted public aid compatible with the internal market. In two separate appeals, Ryanair asked the European courts to annul these decisions on the basis that a formal procedure to ascertain this compatibility had not been opened.

The court stressed that before the pandemic, Alitalia served more than 100 destinations worldwide, carrying over 21 million passengers a year to, from, and between airports across Italy; it was one of the country’s biggest employers with more than 11,000 staff; it was conducting special repatriation flights and maintaining essential services; and was entrusted with public service obligation (PSO) routes in Italy. This was why the Italian government chose the company as the sole beneficiary of the measure, it said.

Likewise, in August 2020, the European Commission approved a Belgian state aid package of EUR300 million (USD354 million at the time) to Lufthansa-owned Brussels Airlines. Ryanair asked the courts early in 2021 to annul this bailout, also because it had been passed without the usual in-depth investigations, but this complaint has now been rejected, with the General Court affirming the commission’s view that it was intended to support an essential company in difficulty during the pandemic.

Brussels Airlines said in a statement that it “is pleased with today’s decision”, pointing out that it had “already fully repaid the aid it received from the Belgian state last year. This repayment took place four years earlier than planned”.

In its own statement, Ryanair said it noted these and other recent EU General Court rulings on Belgian, Italian, Estonian, and Latvian state aid respectively favouring Brussels Airlines, Alitalia, Nordica (ND, Tallinn Lennart Meri), and airBaltic (BT, Riga) “over all other EU airlines”.

The General Court had said that in the latter two cases, airBaltic and Nordica played a major role in the Latvian and Estonian economies, offering essential connections and supporting foreign trade.

“The Covid-19 crisis caused harm to all airlines that contribute to the economy and the connectivity of the European Union as a whole. Nevertheless, Belgium, Italy, Estonia, and Latvia decided to only support their respective flag carriers, even though other airlines operating in their respective markets suffered similar damage as a result of the pandemic,” Ryanair said.

It reminded that “in other cases concerning Covid-19 state aid, the EU General Court ruled in May 2023 that billions of euros in aid received by SAS Scandinavian Airlines, Lufthansa, and certain Italian airlines were unlawful. The European Commission’s Directorate General for Competition has still not recovered the unlawful aid, nor has it imposed any measures to remedy the damage to competition caused by the Swedish, Danish, German, and Italian governments favouring their local airlines over other EU airlines, in breach of EU law.”