Ryanair has welcomed a ruling by the EU General Court saying the European Commission was wrong to approve the doling out of more than €7bn to Lufthansa and SAS by the German and Swedish and Danish governments, respectively, to help the airlines during the Covid crisis.
The EU General Court found the European Commission made a number of errors in its approval of the aid to Lufthansa, including ignoring Lufthansa’s dominance in Germany, and failing to assess whether Lufthansa could have obtained financing on the markets instead of obtaining State aid from the German government.
“While the Covid-19 crisis caused serious damage to all airlines, many national governments, including Germany, Sweden and Denmark, rushed through discriminatory subsidy schemes for their former flag carriers, ignoring other airlines that contribute to the economy and the connectivity of the European Union. Ryanair appealed the European Commission’s approval of these illegal subsidies to the EU General Court in 2021,” Ryanair said in a statement.
The European Court of Justice said the Commission shouldn’t have approved a €6bn bailout to Lufthansa under state aid rules and that the German airline hadn’t bought back the State shareholding as swiftly has it should have done.
The ruling follows legal action against the State Aid awards, taken by Ryanair and German carrier Condor.
A Ryanair spokesperson said:
“One of the EU’s greatest achievements is the creation of a single market for air transport. The European Commission’s approval of the German recapitalisation aid to Lufthansa and the Swedish and Danish recapitalisation aid to SAS went against the fundamental principles of EU law. Today’s judgments confirm that the Commission must act as a guardian of the level playing field in air transport and cannot sign-off discriminatory State aid under political pressure by national governments. The Court’s intervention is a triumph for fair competition and consumers across the EU.
“During the Covid-19 pandemic over €40bn in discriminatory State subsidies has been gifted to EU flag carriers. Unless halted by the EU Courts in line with today’s ruling, this State aid spree will distort the market for decades to come. Europe’s emergence from the COVID-19 crisis with a functioning single market depends on airlines being allowed to compete on a level playing field. Undistorted competition eliminates inefficiency and benefits consumers through low fares and choice. Unjustified subsidies, on the other hand, encourage ineffectiveness and will harm consumers for decades to come”.
