The Court of Justice of the European Union has dismissed Ryanair's appeal against a EUR150 million euro (USD162 million) state loan granted to Lufthansa Group member Austrian Airlines (OS, Vienna) during the Covid-19 pandemic in 2020.
In its July 29 judgement, the Luxembourg-based court confirmed the lawfulness of the loan. It dismissed the action brought by Ryanair and now-defunct LaudaMotion against the European Commission's July 6, 2020, approval of the loan. Ryanair's appeal came after it already unsuccessfully challenged that decision before the General Court of the European Union on July 14, 2021.
The Court of Justice clarified that an EU member state can grant aid to a single company to address damage from an exceptional event, like the pandemic. It found that Ryanair and LaudaMotion could not dispute claims that Austrian Airlines had a much larger market share and was more severely impacted by pandemic restrictions than Ryanair. It ruled that the principle of proportionality does not require aid to be distributed among all affected parties in proportion to their exposure.
Additionally, it found that Ryanair and LaudaMotion failed to prove that the assistance to Austrian Airlines created undue barriers to market freedom or had restrictive effects beyond typical state aid. The selective nature of the aid, benefiting only the Austrian carrier, was therefore deemed acceptable.
Ryanair has contested numerous state aid approvals and argues that such assistance created unfair competition. Commenting on the latest court decision, the budget carrier claimed the judgment contrasted with previous decisions by the EU General Court, which found that billions in state aid given to airlines such as Lufthansa, Air France, KLM Royal Dutch Airlines, SAS Scandinavian Airlines, and some Italian carriers were unlawful.
"The European Commission's Directorate General for Competition has still not recovered the unlawful aid, nor has it imposed any measures to remedy the damage to competition caused by the German, French, Dutch, Swedish, Danish, and Italian governments favouring their local airlines over other EU airlines, in breach of EU law," the Irish airline stated.
