EU forced into embarrassing U-turn as court annuls £3bn aid granted to airline | World | News

On Wednesday, the European Court of First Instance annulled the EU Commission‘s green light for €3.4 billion (£3bn) in state aid granted by the Netherlands to KLM during the covid pandemic.

The Irish company, Ryanair, is now seeking measures to address the damage caused to competition by this aid.

The ruling comes after numerous legal battles initiated by Ryanair against the extensive public support provided to airlines during the unprecedented Covid crisis.

While France and the Netherlands defended the support, citing the threat to the survival of the aviation industry, Ryanair argued that it violated competition rules.

Despite the repayment of billions of euros in state aid by airlines to overcome the Covid crisis, Ryanair believes it is insufficient. The company estimates that the aid approved by Brussels during the pandemic for airlines exceeded €40 billion.

In response to the court’s decision, Ryanair issued a press release, hailing the ruling as “a triumph for fair competition and consumers.” The airline is now urging the European Commission to impose remedies to repair the damage caused to competition by what it calls a “massive state bailout.”

Ryanair criticised the Commission’s lenient approach to state aid during the Covid-19 crisis, accusing Member States of supporting their “inefficient zombie airlines” in the name of national prestige.

This is not the first time the European Commission’s approval for Dutch state aid has been annulled. In May 2021, the European courts had already overturned the decision, stating that the Commission had not provided sufficient reasons for its approval. Despite this, Brussels issued a new decision authorising the €3.4 billion aid two months later.

The recent ruling asserts that the Commission erred in defining the beneficiaries of the state aid, failing to consider the links between companies within the Air France-KLM group. The court emphasises the Commission’s duty to examine such links with vigilance when the effects on competition are feared.

Ryanair welcomed the decision, stressing the EU’s commitment to fair competition and calling on the European Commission to recover the illegal state aid and impose remedies to address the damage to competition. The airline’s spokesperson emphasized the importance of undistorted competition, benefiting consumers through low fares and choice.

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