Ryanair, the Irish airline company, had its most recent contestation against an EU court verdict brought to an end. The court had originally determined that the €150 million government-funded Covid loan provided to Austrian Airlines – a competitor of Ryanair – was lawful. Despite Ryanair and its subsidiary Laudamotion, based in Vienna, opposing the EU’s initial court decision arguing that the bloc’s competition regulators had wrongly given approval for the Austrian government’s loan to Lufthansa-owned Austrian Airlines during Covid, their opposition was dismissed.
An affirmation was given by the European Court of Justice, regarded as the court of appeal for the EU, that the loan was indeed lawful due to its issuance under uncommon circumstances. The judges said: “We can ascertain the legality of the subordinated loan of €150 million given to Austrian Airlines by Austria in the summer of 2020.” They further commented that EU member states possess the power to offer assistance to various undertakings or businesses to rectify the aftermath of noteworthy anomalies. The final say on this matter was taken by the Luxembourg-based court, affirming the legality of the loan.
There are prohibitions under EU law against any form of assistance to businesses by the state, as it could potentially disrupt regular commercial rivalry. However, this comes with certain exemptions. Austrian Airlines had been granted a €150 million loan in June 2020 by the Austrian government, a sum that could be converted into a grant to redress the financial burden caused by flight cancellations and rescheduling due to the countrywide lockdown imposed during the pandemic.
Ryanair’s reaction to the decision by the EU General Court, the first port of call for such disputes, was that billions of Euros issued to Lufthansa, Air France KLM, SAS, and certain Italian airlines had been declared unlawful. According to Ryanair, “The directorate general for competition of the European Commission has not yet reclaimed the unlawful aid,”. It further stated that no remedial measures have been imposed to rectify the damage caused to competition by various governments, including Germany, France, the Netherlands, Sweden, Denmark, and Italy. These governments allegedly favoured local airlines more than foreign airlines, “contravening EU law”.
This matter was one of nearly 20 cases involving Ryanair, following other EU member states providing aid or lenient loans to airlines. This occurred during the stringent pandemic restrictions that essentially halted airlines’ operations over an extended period.
Ryanair remained firm in its belief that aid was being unfairly allocated to airlines that were former state-owned flag carriers by their respective governments. The Irish airline emerged victorious in challenges related to state support given to airlines such as Lufthansa, Condor, KLM, Air France, and TAP, but did not succeed against SAS and Finnair.