Ryanair Loses Court Battle Over French and Swedish COVID Aid

Ryanair  has faced a setback as the Court of Justice of the European Union rejected the airline’s appeal concerning COVID-19 support measures provided to airlines in Sweden and France during the early stages of the pandemic. The court ruled against all arguments put forward by the low-cost carrier in a decision issued on November 23.

In 2020, France and Sweden implemented measures to alleviate financial pressures on their airlines. France allowed operators with a French air operator’s certificate (AOC) to defer payments for civil aviation and solidarity taxes, while Sweden permitted its AOC holders to obtain government guarantees for loans of up to SEK 5 billion kronor (USD 476 million). These measures received approval from the European Commission.

Ryanair contested the decision and initially challenged it in the European Union’s General Court. The General Court dismissed the application, leading Ryanair to escalate the matter by appealing to the Court of Justice on five grounds. The arguments included allegations of discrimination, infringement of the free movement of services, errors in the application of a balancing test, and a violation of procedural rights.

Justice Alfredo Calot Escobar dismissed all five arguments and upheld the previous decisions. He emphasized that aid cannot be deemed incompatible with the internal market based solely on whether it is selective or distorts competition. The ruling requires Ryanair to cover its costs as well as the European Union’s costs. Additionally, the governments of Sweden and France, as interveners in the initial action, are obligated to bear their costs.

This decision marks a legal setback for Ryanair and underscores the complexities surrounding state aid in the aviation sector during the pandemic. Stay tuned for further developments as the airline industry continues to navigate the aftermath of COVID-19.