Ryanair vows to appeal EU court loss in airline bailouts case

The subsidies that the two airlines received from the state-owned airport in Klagenfurt were in violation of EU state aid rules. [EPA-EFE/ANDY RAIN]

Ryanair lost on Wednesday (17 February) two EU court challenges to massive public bailouts of rival companies such as Air France and SAS designed to help them get through the coronavirus pandemic – an outcome the company immediately said it would appeal.

The Irish low-cost airline has pursued a legal campaign across Europe to stop bailout deals for the bloc’s legacy airlines, arguing the state aid gives them an unfair advantage.

Ryanair has long railed against the support given to national champions, and is often backed by the European Commission, which requests that companies make concessions – such as giving up valuable departure slots in busy airports – in return for state aid.

But the company lost two cases on Wednesday: one involving a tax delay for Air France and other French airlines, and another that offers loan guarantees for Sweden’s airlines, mainly SAS.

Ryanair said it would appeal, sending the cases to the EU’s highest court, the European Court of Justice.

The EU’s lower General Court, based in Luxembourg, said in a statement that “this aid scheme is appropriate to remedy the economic damage caused by the COVID-19 pandemic and does not constitute discrimination,” in reference to the French case.

On the Swedish case, the court said that the limitation of the loan guarantee scheme to national airlines “is appropriate for achieving the objective of remedying the serious disturbance in Sweden’s economy”.

Ryanair, Europe’s biggest airline in terms of passenger numbers, is also seeking to undo Germany’s bailout of Lufthansa in the EU courts, as well as schemes in Spain, the Netherlands, Denmark and Portugal.

Fair competition

Ryanair said it is counting on Europe’s higher court to “give airlines and consumers a glimmer of hope that national politicians obsessed with their flag carriers will be sent back to the drawing board and required to use state aid wisely”.

This would “assist the recovery of traffic in the post-COVID world instead of bailing out their favoured airline at the expense of fair competition and consumers,” the company added.

In a brief statement, Air France welcomed Wednesday’s decision in its favour.

Ryanair estimates the total state aid to airlines approved by Brussels since the beginning of the pandemic at more than 30 billion euros, including 11 billion to Lufthansa, 10.6 billion to Air France-KLM, 3.5 billion to Alitalia, and 1.3 billion to SAS.

Based in Ireland but hugely popular in the UK, Ryanair was able to get an emergency loan worth 690 million euro from British public authorities in May last year.

Ryanair has also criticised the EU’s decision to continue to waive the “use it or lose it” airport slot rules during the pandemic, breaking with the official (more positive) position of A4E, the airline representative group the company is a member of.

The slot waiver measure was first introduced in March 2020 to stop pandemic-hit airlines from flying almost empty planes – so-called “ghost flights” – to maintain access to ports.

The company decried the decision, saying it distorts competition and allows dominant airlines to maintain slots at major airports that could be offered to better-performing low-cost carriers.

Parliament passes measures to prevent return of ‘ghost flights’

The European Parliament approved a revamp of the EU’s “use it or lose it” waiver for airport slot rules on Thursday (11 February), a measure first introduced in March 2020 to stop pandemic-hit airlines from flying almost empty planes to maintain access to ports.

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