A top EU court has rejected Ryanair’s legal challenge to state aid given to rival airlines during the pandemic in a victory for the 27-member bloc.
Judges at the General Court said that government support, which was cleared by the European Commission, was not discriminatory.
In reference to the French state aid scheme, the Luxembourg-based court said it was “appropriate for making good the economic damage caused by the Covid-19 pandemic and does not constitute discrimination”.
Support given by the Swedish scheme, the court said, was also “in the interest” of the bloc.
Ryanair has said it will appeal. “Now is the time for the European Commission to stop caving in to national governments’ inefficient bailout policies and start protecting the single market, Europe’s greatest asset for future economic recovery,” it said in a statement.
The European Commission said: “The General Court found that the French and Swedish schemes approved by the Commission were necessary, appropriate and proportionate and do not constitute a breach of the principle of non-discrimination on grounds of nationality, nor do they involve an unjustified restriction on the freedom to provide services.”
European governments have poured billions of euros into helping national carriers during the pandemic.
Ryanair has filed 16 cases to test the state aid rules in the European courts, and argues that support that is made available to national flag carriers only is discriminatory and undermines the EU’s single market in air travel.
The low-cost carrier said more than €30bn in state aid had been “gifted to EU flag carriers”.
“If allowed to stand, this will distort the level playing field in EU aviation for decades to come,” it said.
Ryanair draws a distinction between aid offered to specific companies only and schemes that are open to all, such as the UK’s Covid Corporate Financing Facility. Ryanair has accessed £600m of liquidity from this facility to shore up its balance sheet.
The International Air Transport Association, which represents the world’s airlines, has said that government support will be critical to stop airlines from collapsing as the disruption from the pandemic enters its second year.