The Court of Justice of the European Union (CJEU) has annulled earlier decisions ordering easyJet (London Luton) and Volotea (V7, Asturias) to repay Italian government aid they received for launching new routes out of Olbia and Cagliari airports between 2010 and 2014.

Ruling on an appeal brought by the two airlines, the CJEU found that both the 2016 decision by the European Commission ordering the two airlines to return the funds and the 2020 ruling by the lower-instance General Court upholding this decision, were erroneous. In particular, the CJEU concluded that the earlier rulings wrongly assumed that the aid awarded was not in compliance with state aid rules.

"The Court of Justice finds that the General Court, in the judgments under appeal, did not ascertain whether the Commission had fulfilled its obligation, in the decision at issue, to determine whether the contracts for the provision of services concluded between the airport operators and the airlines constituted normal market transactions," the ruling said.

The ruling resets a long-running case which dates back to the law adopted in 2010 by the Italian government to earmark EUR68.7 million euros (USD70.9 million) in public funds to distribute to the operators of airports in Sardinia for route support schemes. easyJet and Volotea subsequently secured contracts with Olbia airport (at that time majority-owned by Meridiana fly (Olbia)) and Cagliari airport (operated by privately-owned Sogaer) for subsidies covering 2010-2014. In 2016, the Commission ruled that these funds were awarded without the necessary test of a private investor by the regional authority and ordered both carriers to return all funds.

The CJEU ruling does not explicitly say that the scheme was compliant with strict EU state aid rules but only overturns the Commission's and the General Court's verdicts to that effect.