Ryanair has lost its final challenge to a European Union court ruling that a €150 million government Covid loan to rival Austrian Airlines was legal.
The Irish group and its Vienna-based subsidiary Laudamotion appealed an EU general court ruling that the bloc’s competition regulators were wrong to approve a loan to Lufthansa-owned Austrian Airlines from the country’s government during the pandemic.
However, the European Court of Justice, the EU’s court of appeal, ruled that the loan was legal as it was granted under exceptional circumstances.
“The Court of Justice confirms the lawfulness of the subordinated loan of €150 million granted by Austria to Austrian Airlines in the summer of 2020,” judges said.
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They added that member states could give aid to single undertakings or businesses to repair damage done by exceptional occurrences. The Luxembourg-based court’s ruling is final.
EU law bans state aid to businesses where it risks distorting normal commercial competition, with some exceptions.
Austria’s government gave the €150 million loan, convertible to a grant, to Austrian Airlines in June 2020, to compensate it for the cost of cancelling and rescheduling flights as the country locked down in the face of the pandemic.
Ryanair responded that the EU General Court, where cases are first heard, ruled that billions of euro to Lufthansa, Air France KLM, SAS and some Italian carriers was unlawful.
“The European Commission’s directorate general for competition has still not recovered the unlawful aid,” said the company.
Ryanair added that neither had it imposed any measures to remedy the damage done to competition caused by the German, French, Dutch, Swedish, Danish and Italian governments, which favoured local airlines over other carriers “in breach of EU law”.
The case was one of around 20 that Ryanair took after many EU member states gave aid or soft loans to airlines as tough pandemic curbs effectively grounded them for long periods.
The Irish group maintained that governments favoured airlines that had previously been state-owned flag carriers when they doled out aid to the industry.
It won challenges against state support given to Lufthansa, Condor, KLM, Air France and TAP but lost those against SAS and Finnair.
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