The European Court Of Justice Failed In Its Judgment On Ryanair And Supported State Aid To The Airline

2021-02-17   |   by CusiGO

The Luxembourg based General Court of the European Union (tgeu) rejected Ryanair’s appeal against state aid, which helped save SAS, the Swedish airline, and France granted a tax freeze on the airline. According to the judgment, such assistance is in accordance with community law because it is designed to mitigate natural or special disasters, such as epidemics, and is non discriminatory. The Irish low-cost company announced yesterday that it would sue the European Court of justice, the highest legal body in Europe.

Ryanair’s assistance in France – to postpone the payment of civil aviation fees and ticket solidarity fees until January 1, 2021 – will be used by all French airlines, while Sweden’s guarantee will be limited to all Swedish airlines. So Ryanair argues that aid is discriminatory. The European Commission approved the aid as part of a relaxation of its national aid rules to save companies particularly affected by the epidemic, and approved it in March and April 2020.

In both cases, tgeu understands that assistance is in line with Article 107 of the Treaty on the functioning of the European Union, which empowers “assistance in the repair of damage caused by natural disasters or other special events”, such as epidemics, France’s suspension and Sweden’s support are meant to make up for these losses.

In addition, the court held that there was no discrimination because the ownership requirement for aid meant that the headquarters and main business centers of aid were located in the countries that approved the aid and were “controlled by the financial and reputation of those countries.”, This creates a “reciprocal obligation” link between businesses and authorities. That is to say, companies operating and taxing in the countries that provide assistance should receive assistance. It also believes that in both cases aid is proportionate and appropriate, not excessive.

The judgment of the ordinary court, the first judgment on AIDS, The Spanish government approved the injection of 475 million euros of public funds into air Europa in November last year to support strategic Airlines affected by the epidemic, which opened the door to declaring the company legal. Ryanair also threatened to bring the aid to Brussels.

Ryanair has submitted 16 applications to the European Commission for permission to provide national assistance to individual airlines. Only Lufthansa, Air France KLM, Alitalia, SAS, Finnish airlines, Norwegian airlines and tap have received 30 billion euros of national capital injection. The German government has approved 11 billion euros of assistance to Lufthansa and its group, including direct holding and government guaranteed loans, so that it can control 20% of the shares, but can be increased to 25%, becoming the largest shareholder. Air France KLM, the largest shareholder of Air France and the Netherlands with a 28% stake, has a 10.6 billion euro aid plan. Alitalia, which went bankrupt before the pandemic, will have to be completely re nationalized at a minimum cost of 3.5 billion euros. Tap, as a private company in Portugal, has just completed five years. After injection of 1.2 billion euro, tap will return to the state with 75%.

Ryanair announced that it would appeal against tgeu’s ruling because it had two months and 10 days and, in a stern statement, described the aid as “clearly not in line with the single market” because it was limited to certain nationalities. “Ryanair is a real European airline. “We don’t have a rich and powerful country of origin to subsidize us in difficult times, and we don’t want discriminatory aid,” he said aloud. During the pandemic, the EU provided 30 billion euros of aid to the former flagship airlines, which he called “zombies.”.

That’s it. He believes that the European Court of justice will overturn the tgeu ruling and “bring a glimmer of hope to airlines and consumers that national politicians obsessed with their airlines will start from scratch and be forced to make the right use of state aid to help restore air traffic in the Persian Kovic world.” It’s about saving airlines at the expense of fair competition and the interests of consumers. “