EU court to hear Ryanair action on aid to Aegean Airlines

The Court of Justice of the European Union’s Luxembourg-based General Court has said it will hear a review, initiated by Ryanair (FR, Dublin Int’l), of the European Commission’s approval of state aid to Aegean Airlines (A3, Athens Int’l).

In Ryanair’s latest legal challenge to bailouts handed to European carriers since the outbreak of Covid-19, the General Court agreed to assess the Irish low-cost carrier’s “action for annulment” against the European competition regulator’s decision to back the Greek government’s aid package.

In December, the commission backed a Greek state grant of EUR120 million euros (USD142 million) to the privately-owned flag carrier, judging it to be in line with the bloc’s loosened Covid-era state aid rules. The sum “does not exceed the estimated damage caused to the airline between March 23 and June 30” of last year, it said in its statement at the time.

The aid was conditional on Aegean Airlines undertaking a share capital increase of EUR60 million (USD71 million), which it announced it completed in June.

However, the court summarised in its recent resolution to hear the case that “the applicant, Ireland-based Ryanair DAC, is challenging several state aid measures for the airline sector throughout the EU that were granted during the Covid-19 pandemic. In support of its action, it contends that the European Commission […] committed a manifest error of assessment in its review of the proportionality of the aid to the damage caused by the Covid-19 crisis” and “violated several principles of EU law.”

Ryanair has sought to undo bailouts handed to Air France, Finnair, KLM Royal Dutch Airlines, Lufthansa, SAS Scandinavian Airlines, TAP Air Portugal, LOT Polish Airlines, and other major EU airlines, mostly without success. It has argued that the European regulator’s approvals of state aid have gone “against the fundamental principles of EU law and reversed the clock on the process of liberalisation in air transport by rewarding inefficiency and encouraging unfair competition.”

Aegean Airlines was not immediately available for comment.