Tui fly, Ryanair Klagenfurt suits denied, Ryanair to appeal
TUI fly (Germany) (X3, Hanover) and Ryanair (FR, Dublin Int’l) have had respective cases at the European Court of Justice dismissed, which they filed in 2018 seeking to reverse an earlier decision by the European Commission ordering them to return subsidies received for flights from Klagenfurt, a dual-use civilian and military airport in southern Austria.
As ch-aviation reported at the time, the European Union regulator had argued that the subsidies handed to the airlines between 2002 and 2012 under service and marketing agreements distorted competition, and in 2016 it ordered the two carriers to return a total of EUR12.7 million euros (USD14.7 million) plus interest.
Most of this sum, EUR9.6 million (USD11.1 million) according to Brussels’ estimates, had gone to Hapag-Lloyd Express, which merged with Hapag-Lloyd Flug in 2007 to form TUI fly, while TUI fly itself had allegedly received an additional EUR1.1 million (USD1.3 million) and Ryanair around EUR2 million (USD2.3 million).
The Luxembourg-based General Court, Europe’s second-highest court, agreed with the European Commission in both cases, rejecting on September 29 the two airlines’ separately filed challenges against the order to repay the “illegal aid”. Ryanair said it would appeal by taking its case to Europe’s highest court, the European Court of Justice.
Klagenfurt Airport has been owned and operated by Kärntner Flughafen Betriebsgesellschaft mbH (KFBG) since 1939, and since 2003 the shares in KFBG have been held by the province of Carinthia (80%) and the city of Klagenfurt (20%). In November 2008, the province’s 80% stake was transferred to Kärntner Landes- und Hypothekenbank-Holding, a Carinthia state holding company. Brussels therefore classed the payments to the airlines as state aid.
Ryanair’s case (T-448/18 Ryanair and Others v Commission) consisted of six pleas, TUI fly’s (T-447/18 TUIfly v Commission) of seven pleas. In its verdicts, amounting to 434 paragraphs in the former and 215 in the latter, the court ruled that “the action must be dismissed in its entirety” in both cases and that the applicants must bear their own legal costs and pay the European Commission’s costs.
Contacted by ch-aviation, TUI fly declined to comment, while while Ryanair said it “yesterday (29 Sep) noted and confirmed that it would appeal to the EU Court of Justice the ruling of the EU General Court regarding historical agreements between Ryanair and Klagenfurt airport. Ryanair urges the European Commission to stop rubber-stamping multi-billion euro state bailouts of bankrupt flag carrier airlines and use its considerable resources to tackle cosy deals between legacy airlines and their monopoly hub airports that prevent the emergence of fresh competition.”
Klagenfurt has seen minimal scheduled traffic since the subsidies were terminated, and even less since the Covid-19 outbreak. According to the ch-aviation capacities module, it currently sees 12 weekly flights, ten of them to Vienna courtesy of Austrian Airlines (OS, Vienna) and two to Cologne/Bonn operated by Eurowings (EW, Düsseldorf).