Ryanair loses legal fight against French, Swedish airline state aid

6:33 am Wednesday, February 17th, 2021

By Foo Yun Chee

BRUSSELS (Reuters) – Ryanair on Wednesday lost its fight against the state aid granted to rivals including Air France and Sweden’s SAS after a top European court said such schemes were not discriminatory amid the COVID-19 pandemic.

The judgment from the Luxembourg-based General Court is the first to deal with aid measures cleared by the European Commission under easier rules aimed at helping European Union governments prop up companies hit by the health crisis.

The court said the French and Swedish schemes were in line with the bloc’s rules. The airline industry has been one of the hardest-hit by virus-related restrictions and lockdowns imposed by governments worldwide.

“That aid scheme is appropriate for making good the economic damage caused by the COVID-19 pandemic and does not constitute discrimination,” the court said, referring to the French scheme.

For the Swedish scheme, it said: “The scheme at issue is presumed to have been adopted in the interest of the European Union.”

Ryanair said it would appeal to the EU Court of Justice in a process likely to take several years.

The company had taken issue with the European Commission for clearing a French scheme allowing airlines to defer certain aeronautical taxes and Sweden’s loan guarantee scheme for airlines. Both schemes benefited their flag carriers.

Europe’s biggest budget airline has filed 16 lawsuits against the Commission for allowing state aid to individual airlines such as Lufthansa, KLM, Austrian Airlines and TAP, as well as national schemes that mainly benefit flag carriers.

EU competition enforcers have to date cleared more than 3 trillion euros ($3.6 trillion) to help virus-hit companies across the 27-country bloc.

The cases are T-238/20 Ryanair v Commission and T-259/20 Ryanair v Commission.

($1 = 0.8288 euros)

(Reporting by Foo Yun Chee. Additional reporting by Ilona Wissenbach in Frankfurt and Graham Fahy in Dublin. Editing by Edmund Blair and Mark Potter)