On Wednesday 17 February, the General Court of the European Union validated the public aid paid by France and Sweden to save their airlines Air France and SAS, which have been devastated by the effects of the coronavirus pandemic.
In two judgments (cases T-259/20 and T-238/20), it dismissed Ryanair’s applications to annul the European Commission decisions giving the green light to the French and Swedish State Aid.
France. For the General Court, the moratorium on the payment of taxes put in place by France to support French-licenced airlines in the context of the Covid-19 pandemic is “compatible with EU law”.
The General Court confirmed, on the one hand, that the pandemic and the transport restriction and lockdown measures adopted by France constituted “an exceptional occurrence” (within the meaning of Article 107(2) of the Treaty) which “caused economic damage to airlines operating in France”. According to the General Court, it is also not disputable that the purpose of the moratorium on the payment of fees is indeed that of remedying the said damage.
Link to the judgement: https://bit.ly/2NEeb03
Sweden. Similarly, the loan guarantee scheme set up by Sweden to support airlines holding a Swedish operating licence in the context of the pandemic and intended to remedy the serious disturbance to the economy of that Member State is “compatible with EU law”, according to the General Court’s judgment.
In particular, the General Court finds that the limitation of the loan guarantee scheme to airlines holding a Swedish licence is “appropriate for achieving the objective of remedying the serious disturbance in Sweden’s economy”.
Link to the other judgement: https://bit.ly/3u1wL3b
This is the first time that the General Court has ruled on the legality of a State Aid scheme during the Covid-19 pandemic, while a dozen other proceedings launched by Ryanair and aimed at other countries are under investigation.
The Irish company had filed a lawsuit in May 2020 to denounce, on the one hand, loans guaranteed by Sweden, notably to the Scandinavian company SAS, and, on the other hand, a tax deferral granted by the French government to Air France. This aid should allow for these companies to get through the crisis that has grounded the planes.
These arrangements were validated in March 2020 by the European Commission under the Temporary Framework on State Aid in the exceptional context of the pandemic.
Ryanair had denounced a distortion of competition as well as a violation of principles of European law such as the prohibition of discrimination based on nationality and the free movement of services.
Ryanair will appeal. The airline Ryanair immediately announced its intention to appeal the decision of the Court, which had rejected its appeals. “Following today’s rulings, Ryanair will now refer these matters to the Court of Justice of the European Union” according to a press release from the low-cost carrier, which denounced a distortion of competition. (Original version in French by Lionel Changeur)