DALLAS – Ryanair (FR) has won a case against €130m (US$140m) of state aid granted to Italian airlines holding an operating licence issued by the relevant authorities during the Covid-19 pandemic.
The European Court of Justice, Europe’s second-highest court, sided with the Dublin-based carrier against the European Commission (EC), which had given the green light to financial aid. FR had said the EC should have prevented the Italian government from issuing financial assistance under the rules of the Single Market.
In a statement, the court said, “According to settled case law, a decision not to initiate the formal investigation procedure in respect of notified aid must set out the reasons for which the Commission takes the view that it is not faced with serious difficulties in assessing the compatibility of the aid at issue with the internal market. The General Court finds that that has not been done here.”
FR has taken several cases to court, challenging subsidiaries given to rival airlines. Earlier this month, it won a lawsuit against the €6bn (US$6.4bn) of state aid granted to German flag carrier Lufthansa (LH) as well as a case raised against SAS Scandinavian Airlines (SK) granting of €1bn (US$1bn) aid.
A spokesperson for Ryanair said, “One of the EU’s greatest achievements is the creation of a single market for air transport. The European Commission’s approval of the aid scheme limited to airlines with an operating licence issued by the Italian State went against the fundamental principles of EU law. Today’s judgment confirms that the Commission must act as a guardian of the level playing field in air transport and cannot sign off discriminatory State aid under political pressure by national governments. The Court’s intervention is a triumph for fair competition and consumers across the EU.
“During the Covid-19 pandemic over €40bn in discriminatory State subsidies has been gifted to EU flag carriers. Unless halted by the EU Courts in line with today’s ruling, this State aid spree will distort the market for decades to come. Europe’s emergence from the Covid-19 crisis with a functioning single market depends on airlines being allowed to compete on a level playing field. Undistorted competition eliminates inefficiency and benefits consumers through low fares and choice. Unjustified subsidies, on the other hand, encourage ineffectiveness and will harm consumers for decades to come.”
Featured Image: Ryanair (EI-HEZ) Boeing 737-8-200. Photo: Alberto Cucini/Airways.