Rare wins for Ryanair in EU court ruling on aid for KLM, TAP

BRUSSELS (Reuters) -Ryanair won two victories in its fight against billions of euros in state aid granted to rivals as Europe’s second-highest court annulled EU-approved schemes for KLM and Portugal’s TAP.

The Luxembourg-based General Court, however, said the annulments and recovery of the aid would be suspended pending new decisions by the Commission.

“The General Court annuls the Commission’s decision to approve the Netherlands financial aid for the airline KLM amid the COVID-19 pandemic on the grounds of inadequate reasoning,” the Court said.

Judges also rejected the EU executive’s clearance of state aid for Portuguese carrier TAP, citing “an inadequate statement of reasons” by the Commission.

The EU competition enforcer last year cleared a 3.4-billion-euro ($4.15 billion) Dutch bailout for airline KLM and a 1.2 billion euro rescue loan for Transportes Aereos Portugueses (TAP).

“The European Commission’s approvals of state aid to Air France-KLM and TAP went 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,” Ryanair said following the ruling.

On Wednesday the Court rejected Ryanair’s challenge to a 10-billion- euro Spanish fund for virus-hit companies approved by the European Commission, saying the measure complied with EU laws.

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Governments around the world have pumped billions of euros into the airline industry hit by virus-related restrictions and lockdowns.

Last month, the same court backed EU competition regulators’ approval of support for SAS and Finnair while in February judges also upheld state aid granted to rivals including Air France and SAS.

Europe’s biggest budget airline has filed 16 lawsuits against the Commission for allowing state aid to individual airlines such as Lufthansa, KLM, Austrian Airlines and TAP, as well as national schemes that mainly benefit flag carriers.

The cases are T-465/20 Ryanair v Commission, T-643/20 Ryanair v Commission and T-628/20 Ryanair v Commission.

($1 = 0.8187 euros)

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