Wednesday 14 April 2021 10:53 am

Ryanair loses legal challenges to EU state aid for Scandi airlines

Ryanair has this morning lost its attempt to have state aid provided by the EU to Scandinavian airlines SAS and Finnair ruled unlawful.

The Luxembourg-based General Court, the EU’s second highest legal body, ruled that the bailouts were in compliance with the bloc’s rules on state aid.

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The ruling is another blow to the airline, whose boss Michael O’Leary has been extremely vocal about the damage that such aid could do to competition in the European aviation market.

Ryanair said that it would appeal the rulings.

Finnair and SAS have received hundreds of millions of euros from the European Commission in a bid to protect the firms from the coronavirus pandemic.

“Given that SAS’s market share is much higher than that of its closest competitor in those two member states, the aid does not amount to unlawful discrimination,” the General Court ruled.

On Finnair’s bailout, it said: “The guarantee was necessary in order to remedy the serious disturbance in the Finnish economy in view of the importance of Finnair for that economy.”

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In response, Ryanair’s spokesperson said: “One of the EU’s greatest achievements is the creation of a true single market for air transport.  The European Commission’s approvals of the Finnish, Danish and Swedish State aid went against the fundamental principles of EU law.

“Today’s judgments set the process of liberalisation in air transport back by 30 years by allowing Finland, Denmark and Sweden to give their national flag carriers a leg up over more efficient competitors, based purely on nationality.” 

In total, Ryanair has filed 16 cases against European airlines, including a challenge to the German government’s €11bn bailout of Lufthansa.

The low-cost carrier has argued that the €30bn of “discriminatory” subsidies given to EU carriers would “distort the level playing field in EU aviation for decades to come, giving chronically inefficient national airlines a leg up on their efficient low-fare competitors”.

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Unlike their European counterparts, UK-based carriers have not been propped up by their governments through direct aid, although they have made extensive use of business support schemes.

Ryanair has received a £600m loan under the Bank of England’s Covid Corporate Financing Facility (CCFF), as well as €66m from various European payroll support schemes.