EU Court of Justice sides with Ryanair in KLM aid case

Ryanair welcomes court ruling (Representative)

The European Union’s top court on Wednesday again canceled approval of KLM’s pandemic state aid package, handing a new victory to its Irish rival Ryanair.

The General Court has ruled that the European Commission’s decision to approve financial aid from the Dutch government to KLM, the flagship carrier of the Air France-KLM Group, was “wrong”.

KLM received 3.4 billion euros ($3.7 billion) in funding from the Dutch government after the coronavirus pandemic grounded the aviation industry in 2020.

The court said the commission “erred in defining the beneficiaries” by excluding the group’s holding company and Air France from being recipients of the aid.

The Commission, the EU’s antitrust regulator, approved the aid in 2020, but the Luxembourg-based General Court annulled the decision the following year.

The committee subsequently approved the aid again in 2021, but Ryanair challenged this.

Ryanair has posed several challenges to government bailouts of other airlines during the pandemic, including Deutsche Lufthansa and Scandinavian Airways’ SAS.

Air France-KLM told AFP its airline “takes note” of the decision.

“Air France-KLM and KLM will carefully study this judgment and assess its implications. They will consider whether to lodge an appeal,” the company said in a statement.

It added that the emergency loans were repaid in full with interest, making the financial consequences of the court ruling uncertain.

Ryanair welcomed the court’s ruling, calling it a “win for fair competition and consumers across the EU”.

The Irish airline also said the total state aid approved by Brussels for airlines during the epidemic was 40 billion euros.

The European Court of Justice issued a similar ruling in December last year, ruling that the European Commission’s decision to approve the French government’s financial assistance to Air France-KLM Group was “wrong”.

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