Ryanair (FR, Dublin International) will appeal against two rulings issued on February 17 at the General Court of the European Union, the second-highest court in Europe, in which state aid for Air France (AF, Paris CDG) and SAS Scandinavian Airlines (SK, Copenhagen Kastrup) was judged not to have broken state aid rules.
The low-cost carrier will now take its fight against subsidies for airlines - in these cases a French airport tax deferral and a Swedish loan guarantee - to the supreme court, the European Court of Justice, it protested in a statement.
The measures were introduced at the beginning of the current crisis “with nationality conditions,” Ryanair argued, the French scheme being reserved for French-registered airlines, the Swedish scheme for Swedish-registered carriers.
This excluded “all other EU airlines, which were also damaged by Covid-19, despite their contribution to connectivity, jobs, traffic growth and the wider economy in France and Sweden,” Ryanair said. It launched cases against the European Commission’s approvals of the schemes in May 2020.
“One of the EU’s greatest achievements is the creation of a true single market for air transport, underpinned by the principle of a common EU airline licence - one for each airline. A nationality condition in a state aid scheme is plainly incompatible with the single market,” the airline said.
“We hope that the Court of Justice will overturn the European Commission’s approvals of the French and Swedish schemes, to give airlines and consumers a glimmer of hope that national politicians obsessed with their flag carriers will be sent back to the drawing board and required to use state aid wisely [...] instead of bailing out their favoured airline.”
Ryanair has also appealed at the European level to challenge state aid given by countries to Finnair, KLM Royal Dutch Airlines, Lufthansa, and TAP Air Portugal as well as Air France and SAS.
The General Court said in one of its rulings that extending France’s tax deferral to non-French companies “would not, by contrast, have made it possible to achieve the objective of making good the economic damage suffered by the airlines operating in France in so precise a manner and without a risk of overcompensation.”
The Swedish scheme, meanwhile, which “is appropriate for achieving the objective of remedying the serious disturbance in Sweden’s economy,” according to the court, was also “presumed to have been adopted in the interest of the European Union.”
EU law normally bans state aid whenever it threatens to distort competition, but with the onset of the pandemic and its impact on the aviation industry, regulators at the European Commission loosened the rules for government support for airlines.
While Air France was not immediately available for comment, SAS told ch-aviation: “SAS welcomes the European court’s judgement, which confirms that the Swedish scheme is compatible with EU laws.”
