The Luxembourg-based European General Court has dismissed a complaint Ryanair (FR, Dublin Int'l) brought against the European Commission’s approval of state aid last year for Lufthansa Group subsidiary Austrian Airlines (OS, Vienna).

Ryanair and its own Austrian subsidiary at the time, Lauda (now Lauda Europe), sued against the Austrian government’s assistance of EUR150 million euros (USD178 million) to the flag carrier. The aid was meant as compensation for the damage caused to Austrian Airlines' finances during the Covid-19 pandemic.

The sum was part of a total financing package worth EUR600 million (USD709 million) that also included an equity grant of EUR150 million from Lufthansa and a state-guaranteed bank loan of EUR300 million (USD354 million).

“The General Court confirms that the aid granted by Austria to Austrian Airlines in order to compensate it for the damage resulting from the cancellation or rescheduling of its flights due to the Covid-19 pandemic is compatible with the internal market,” the court said in its July 14 ruling.

The court agreed with the commission that “aid to make good damage caused by natural disasters or exceptional occurrences is compatible with the internal market” of the European Union.

“That aid, having been deducted from the subsidies granted, in the same context, by Germany to Lufthansa Group, which includes Austrian Airlines, does not constitute overcompensation in favour of that group,” the court elaborated.

Austrian commented in its own statement: “The ruling by the European General Court allows Austrian Airlines to continue flying high. The aid of EUR150 million approved in July 2020 was and is still necessary to safeguard Austria’s largest aviation company with more than 6,000 employees and to maintain Austria’s international connections via the Vienna hub in the long term.”

Ryanair has launched 16 lawsuits against the European Commission for approving billions of euros to be channelled from the national budgets of member states to individual airlines hit by coronavirus-related travel restrictions. So far, the European General Court has ruled in favour of Ryanair against aid handed to Condor, KLM Royal Dutch Airlines, and TAP Air Portugal but has thrown out its challenges against aid for Air France, Finnair, and SAS Scandinavian Airlines.

The budget carrier has said it will appeal the latest ruling to Europe’s highest court, the European Court of Justice.