EU Court Upholds €1.9M State Aid to TAROM, Dismisses Wizz Air Appeal
The Court of Justice of the European Union (CJEU) has dismissed Wizz Air’s appeal against a €1.9 million ($2 million) state aid package granted by the Romanian government to TAROM, Romania’s national airline, to offset Covid-19-related losses. Approved by the European Commission in April 2022, the aid was allocated from Romania’s general budget to cover losses that TAROM incurred between July 1 and December 31, 2020.
In its ruling, the CJEU confirmed that the European Commission had conducted a proportional assessment of the aid, ensuring that it was strictly limited to cover TAROM’s pandemic-related losses without overcompensation. According to the court, the commission accurately calculated TAROM’s losses, and the airline had implemented reasonable measures to minimize financial impacts from travel restrictions during the pandemic.
Wizz Air’s appeal argued that previous aid granted to TAROM had not been considered when approving this new support. However, the CJEU rejected this claim, clarifying that the earlier aid and the 2022 package addressed distinct financial needs and did not overlap in covering TAROM’s costs. The court also noted that the European Commission was not required to assess any indirect advantage TAROM might gain, including any competitive benefit that Wizz Air alleged.
This is not Wizz Air’s first attempt to challenge state support for TAROM. The low-cost carrier previously filed an appeal against a government grant of RON175.95 million ($40 million at the time) provided to TAROM just before the Covid-19 crisis, which the court also dismissed.
In recent years, TAROM has received multiple state aid packages and is currently undergoing restructuring with the support of a €95.26 million ($103 million) package. This additional assistance is aimed at stabilizing the airline’s finances as it works to adapt to market demands.
The CJEU’s decision underscores the EU’s stance on providing targeted aid to airlines affected by the pandemic, supporting state intervention under specific conditions while ensuring compliance with fair competition principles. Wizz Air, which competes with TAROM in Romania, has consistently raised concerns about state aid impacting fair competition in the aviation sector. However, the ruling reinforces that such aid, when appropriately measured and justified, aligns with EU guidelines to support national carriers in crisis without distorting the market.
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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com