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Ryanair wins EU legal challenge to airline state aid

May 19, 2021

The Irish budget carrier, a vocal critic of state bailouts for legacy competitiors, hailed the ruling by judges in Luxembourg. It said aid granted to TAP and KLM only succeded in "rewarding inefficiency."

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FILE PHOTO: A Ryanair Boeing 737 takes off at Palma airport
Image: REUTERS

Ryanair, the Irish budget airline, won two rare EU legal victories on Wednesday in a long-running row over state aid rules.

It had filed complaints with the bloc's General Court in Luxembourg over subsidies provided to Dutch carrier KLM and Portugal's TAP.

Both airlines were provided with government-backed loans at the height of the coronavirus pandemic that were signed off by EU competition officials.

But judges ruled that no repayments would need to be made until the European Commission had made a new decision on the loans.

TAP has yet to comment on the court's decision, while a spokesperson for KLM told Reuters that it was of no consequence given that the EU executive will need to rethink its original stance.

KLM
Dutch carrier KLM tapped support from the government to survive the coronavirus pandemicImage: Robin Utrecht/picture alliance

The Commission has the sole power to police anti-trust rules across the 27-member bloc.

Dublin-based Ryanair can still appeal the ruling.

Ryanair slams EU over state aid policies

The firm said in a statement that the EU had "reversed the clock" on fair competition by "rewarding inefficiency."

The Irish company on Monday posted its biggest loss in its 35-year history, recording a loss of €815 million ($990 million). 

Governments around the world have pumped money into legacy carriers as demand for air travel slumped amid global coronavirus lockdowns.

Ryanair has filed a total of 16 lawsuits with EU authorities to challenge whether the financial help is legal. 

Just last month, the same court ruled in favor of bailouts for Scandanavian giant SAS and Finland's Finnair.

In February, SAS and Air France escaped punishment over breaking EU state aid rules.

Ryanair is also pursuing a similar case against the rescue package for German flagship carrier Lufthansa.

jf/msh (AFP, Reuters)