Ryanair’s appeals contesting the financial assistance given to airlines by the governments of France and Sweden during the COVID-19 pandemic have been rejected by the Court of Justice of the European Union (EU). Initially approved by the European Commission in 2020, Ryanair, an Irish airline, challenged these measures in court, and the General Court found against them. Selectivity or competition concerns alone cannot be used as justification for declaring aid to be incompatible with the internal market, as the EU’s highest court has now upheld these rulings.
Ryanair’s objections specifically targeted the financial assistance provided by France and Sweden to their respective airlines. France’s assistance initiative included the deferment of civil aviation and solidarity tax on airline tickets, applicable to airlines with a French license. The deferral involved rescheduling tax payments to start on January 1, 2021, and spreading them over a 24-month period until December 31, 2022.
Regarding Sweden, the government implemented a program to insure loans for airlines with Swedish licenses to operate that were having trouble because of the pandemic, up to five billion Swedish kronor (SEK).
Aid cannot be declared incompatible with the internal market based only on selectivity or its effect on competition, according to the EU Court of Justice. The court went on to state that the Swedish aid program was assumed to be in the best interests of the European Union and that France’s deferral was considered appropriate to address the economic harm resulting from the COVID-19 pandemic, with no amounting to discrimination.
This decision comes after a previous legal challenge by Ryanair against state aid received by Alitalia and the Lufthansa subsidiary Brussels Airlines during the pandemic. In that instance, the EU court ruled that the financial assistance in the form of loans and recapitalization provided to the two airlines was compatible with the internal market of European Union.
The Court of Justice of the European Union’s decision underscores the regulatory framework allowing EU member states to provide financial support to their airlines during times of crisis, with the condition that such aid is consistent with the internal market and does not distort competition.
