The General Court of the European Union has dismissed the action brought by the airlines Ryanair and Laudamotion to annul the European Commission’s decision of July 2020, which had considered emergency public aid (a subordinated loan of EUR 150 million convertible into a grant) granted by Austria to Austrian Airlines as compatible with EU rules on State aid in response to the Covid-19 pandemic (see EUROPE 12522/8), in a judgment handed down on Wednesday 14 July (case T-677/20).
Contrary to the applicants, the General Court is of the opinion that the European Commission took account of the EUR 6 billion aid package approved two weeks previously by Germany for the Lufthansa group (see EUROPE 12514/6), to which Austrian Airlines belongs, as well as the relationship between them.
The General Court notes in particular that the European Commission ruled out any risk of overcompensation, given that the Lufthansa decision provides for a deduction in the event of support granted by other Member States to the German group’s companies. Thus, the aid granted by Germany to Lufthansa is reduced by the amount of aid granted by Austria to individual companies in the group, so that the overall amount received by the group remains the same.
In view of this deduction mechanism, the General Court concludes that there is no risk that the Austrian aid to Austrian Airlines will also benefit other companies in the Lufthansa group.
Furthermore, the General Court considers that the difference in treatment established by the measure between Austrian Airlines and other airlines operating in Austria is justified because of the essential role of the Austrian airline in serving the country. And it considers that the applicants did not establish how the exclusive nature of the measure in question dissuades them from establishing themselves in Austria or providing air services from and/or to that country.
This is the fourth judgment delivered by the General Court on the compatibility with EU rules of State aid granted to Air France and SAS (see EUROPE 12660/3), KLM and TAP (see EUROPE 12722/24) and Condor (see EUROPE 12737/25) in response to the pandemic.
See the General Court’s judgment: https://bit.ly/36zrncT (Original version in French by Mathieu Bion)