Ryanair (FR, Dublin International) has welcomed a ruling at the General Court, Europe’s second-highest court, on state aid favouring Italian airlines during the Covid-19 pandemic. The court backed the low-cost carrier’s challenge and annulled the European Commission-approved aid.
In October 2020, the EU competition authority allowed Italy to give EUR130 million euros (USD140 million) in subsidies to airlines holding an Italian operating licence. As ch-aviation reported at the time, while the country’s then-flag carrier Alitalia had received EUR199.45 million (USD213.6 million) in Brussels-backed state support in September 2020, three other local carriers, Air Dolomiti, Blue Panorama Airlines, and Neos Air, appealed to the Italian government “to act as quickly as possible” to release the newly-approved EUR130 million.
However, in its May 24 ruling the Luxembourg-based court said that the authority had “failed to provide a statement of reasons for its finding that the measure at issue was not contrary to EU law provisions other than those governing state aid.”
The court explained that “according to settled case-law, a decision not to initiate the formal investigation procedure in respect of notified aid must set out the reasons for which the Commission takes the view that it is not faced with serious difficulties in assessing the compatibility of the aid with the internal market.” The authority “must disclose in a clear and unequivocal fashion the reasons for which” it did not face such difficulties. “The General Court finds that has not been done here, however.”
The Commission now has the option to appeal against the judgement at the European Court of Justice, the EU’s highest court.
It is the second such victory in two weeks for Ryanair, which has filed more than a dozen lawsuits against what it claims to be unfair aid that EU member states provided to airlines during the pandemic, approved by the European Commission. On May 10, the same court ruled in its favour against billions handed to Lufthansa and SAS Scandinavian Airlines.
The budget carrier said after the latest ruling: “While the Covid-19 crisis caused serious damage to all airlines, many national governments, including Italy, rushed through discriminatory subsidy schemes limited to their own former flag carriers, ignoring other airlines that contribute to the economy and the connectivity of the European Union.”
Ryanair said it had appealed the European Commission’s approval of the subsidies as it had been excluded from these schemes, and both of the judgements in May “are a victory for the EU internal market and are damning of the European Commission’s head-in-the-sand approach to massive and discriminatory bailouts of ailing flag carriers by EU member states.” It added: “Unless halted by the EU courts in line with today’s ruling, this state aid spree will distort the market for decades to come.”
