Europe’s second-highest court has dismissed a case Ryanair (FR, Dublin International) brought last year against a European Commission decision to approve EUR11.7 million euros (USD14 million at the time) in state aid to Croatia Airlines (OU, Zagreb Franjo Tuđman), court records show.

The judgement of the European General Court of November 9 in Case T‑111/21, “Ryanair DAC vs European Commission supported by the Republic of Croatia”, disagreed with the Irish low-cost carrier, which had lodged its complaint in May 2021 against a decision in Brussels in 2020 to approve the bailout, provided to the state-owned flag carrier to compensate for pandemic-related travel restrictions that Croatia and other countries introduced between March 19 and June 30, 2020.

As with similar legal action it has instigated during the crisis, Ryanair had argued that EU regulators should have opened an investigation before approving the assistance. It also claimed that the aid to the flag carrier, which already had a dominant share, had distorted the market in particular against Ryanair as “the only real challenger of Croatia Airlines’ market position.”

The court ruled, however, that “the arguments put forward by the applicant [...] are very general and hypothetical, insofar as they do not specifically concern its position on the market in which it competes with the beneficiary of the aid.” These “arguments are inadequately substantiated, with the result that it is not in a position to demonstrate that the aid at issue is liable to have a substantial adverse effect on its market position.”

It added: “Its line of argument is based, in reality, on the mere fact that it is a competitor of Croatia Airlines and that, unlike Croatia Airlines, it does not benefit from aid granted by the Croatian State, which constitutes a competitive disadvantage for the applicant. Such a general line of argument is not sufficient to demonstrate that the applicant’s market position was substantially affected.”

Ryanair had also said that Croatia Airlines received additional Covid-related state aid, which the court in its ruling revealed to have been EUR79.7 million (USD81.8 million), granted in December 2020. However, “as that new aid was granted after the adoption of the contested decision, the Commission cannot, in any event, be criticised for not having taken it into account in the contested decision, since [...] facts subsequent to the adoption of the decision at issue have no effect on its legality.”

The court ordered Ryanair to bear its own legal costs in relation to the case and to pay those incurred by the European Commission, while the Croatian government was also instructed to pay its own court costs.

Ryanair did not immediately respond to ch-aviation’s request for comment and Croatia Airlines declined to comment.