EU court rules state-aid for Air France-KLM & TAP breached rules
The European Union (EU) General Court has ruled that billions given to Air France-KLM and TAP (Air Portugal) in assistance breached EU rules on state aid.
The EU Commission approved the payments of €3.4bn to Air France-KLM and €1.2bn to TAP in 2020 as the airlines struggled with the Coronavirus Pandemic but this decision was appealed by Irish budget airline Ryanair who took the matter to the EU’s General Court.
Ryanair argued that as an independent airline with no “rich home country” that the payments went against competition and effectively shut out independent carriers.
The decision was welcomed by the Irish budget airline who said: “One of the EU’s greatest achievements is the creation of a single market for air transport. The European Commission’s approvals of State aid to Air France-KLM and TAP went against the fundamental principles of EU law and reversed the clock on the process of liberalisation in air transport by rewarding inefficiency and encouraging unfair competition.
“During the Covid-19 pandemic over €30bn in discriminatory State subsidies has been gifted to EU flag carriers. Unless halted by the EU Courts in line with today’s rulings, this State aid spree will distort the market for decades to come. If Europe is to emerge from this crisis with a functioning single market, airlines must be allowed to compete on a level playing field. Today’s rulings in 2 of more than 20 appeals filed to date before the General Court are an important victory for consumers and competition.”
The airline added that over €30bn in state aid had been given to what it described as “inefficient zombie” flag carriers.
The victory however is largely symbolic with it being unlikely that any airline will be asked to repay any money it had received but it could affect the validity of any guarantees offered by their respective governments worrying creditors.