Ryanair Prevails in Legal Challenge Against Italian State Aid to Airlines During COVID

Ryanair has won its legal challenge against Italian state aid given to airlines during the COVID pandemic.

On May 24, 2023, the European Court of Justice decided to annul the European Commission’s clearing of the Italian state aid.

Ryanair argued that the Italian government granted a €130 million ($160M) aid package only to airlines holding an operating license issued by Italy.

“The General Court annuls the Commission’s decision to approve an aid measure consisting in subsidies paid by Italy to Italian airlines in the context of the COVID-19 pandemic,” a statement from the Court of Justice read.

According to the Irish Times, when the Commision was told of the Italian government’s subsidy program in October 2020, no objections were raised.

Ryanair launched legal action, believing that the aid violated principles of European law.

Ryanair said governments, including Italy, “rushed through discriminatory subsidy schemes limited to their own former flag carriers”.

The low-cost carrier argued that “Ryanair is Italy’s largest airline yet was excluded by the Italian government from these schemes”.

Ryanair has launched a number of legal challenges over EU subsidies granted during the COVID pandemic.

The judgment follows on from the EU General Court’s recent annulments of the European Commission’s clearances of aid packages to Lufthansa and to SAS.

“One of the EU’s greatest achievements is the creation of a single market for air transport. The European Commission’s approval of the aid scheme limited to airlines with an operating license issued by the Italian State went against the fundamental principles of EU law,” a Ryanair spokesperson said.

They added: “The judgment confirms that the Commission must act as a guardian of the level playing field in air transport and cannot sign-off discriminatory State aid under political pressure by national governments. The Court’s intervention is a triumph for fair competition and consumers across the EU.”