During the corona pandemic, many countries supported airlines with aid packages worth billions. This is what concerns the European courts – once again a verdict was very clear.
In the dispute over aid for the airline KLM, competitor Ryanair has won a victory before the EU court. The judges in Luxembourg decided that the EU Commission should not have approved the billions in aid from the Netherlands for the airline. It is not the first decision of this kind. Ryanair had, among other things, successfully sued against Corona state aid for Lufthansa.
In 2020, the EU Commission approved state aid from the Netherlands worth 3.4 billion euros to KLM. The loan and a state guarantee for a bank loan were intended to help the company during the corona pandemic. However, the EU General Court declared this authorization null and void. The EU Commission then issued a new decision – which has now been overturned.
According to the judges, the Brussels authorities had incorrectly determined the beneficiaries of the aid. The holding company Air France-KLM and Air France – two companies in the Air France-KLM group – were not counted among the beneficiaries. According to the court, they could at least benefit indirectly from the aid.
If an EU country wants to subsidize a company, the EU Commission checks whether such subsidies distort competition within the EU market. The EU had significantly relaxed its rules for such aid during the corona pandemic, but the EU Commission still had to approve the aid.
The ruling can still be appealed to Europe’s highest court, the ECJ. Ryanair has already initiated several proceedings against the approval of Corona aid. In May, following a lawsuit by the Irish airline, the court declared the Commission’s approval for state Corona aid for Lufthansa to be inadmissible. However, this is still appealing the judgment before the European Court of Justice, which is why the case has not yet been finally resolved. If the decisions remain, the states would have to demand back the state aid.
Source: Stern
