Court Rules That Austrian Airlines’ Aid Was Legal

Irish low-cost carrier Ryanair has lost its challenge against state aid given to Lufthansa Group-owned Austrian Airlines. The ruling made today at the European Union’s second-highest court in Luxemburg decreed that the state aid given to Austrian Airlines complied with EU rules.

Austrian Aircraft
Ryanair loses lawsuit against state aid for Austrian Airlines. Photo: Austrian Airlines

The Court of Justice of the European Union (CJEU) interprets European Union law to make sure it is uniformly applied in all EU countries. The court is also used to settle disputes between national governments and EU institutions. In certain circumstances, the court can be used by individuals, companies, or organizations to take action against EU institutions if they feel that their rights have been infringed.

Following the court ruling Austrian Airlines issued the following statement|:

“The ruling by the European General Court allows Austrian Airlines to continue flying high. The aid of 150 million euros approved in July 2020 was and is still necessary to safeguard Austria’s largest aviation company with more than 6,000 employees and to maintain Austria’s international connections via the Vienna hub in the long term.”

Ryanair launched 16 lawsuits

Europes largest no-frills airline launched 16 legal proceedings against the European Commission for allowing EU airlines to receive state aid. As well as Austrian Airlines, Ryanair objected to aid given to its parent company Lufthansa, EU national flag carrier TAP Portugal, and other European airlines helped by national schemes.

During the height of the COVID-19 pandemic, Austrian Airlines, like other carriers globally, appealed to their national governments for state aid. When the support was granted, Ryanair took grievance and decided to takes its case to the Luxembourg-based General Court.
When reporting on the court’s verdict, today the national broadcaster of Ireland RTE published the following ruling:

“The aid granted by Austria to Austrian Airlines in order to compensate it for the damage resulting from the cancellation or rescheduling of its flights due to the COVID-19 pandemic is compatible with the internal market.

“That aid, having been deducted from the subsidies granted, in the same context, by Germany to the Lufthansa Group, which also includes Austrian Airlines, does not constitute overcompensation in favor of that group.”

Ryanair lawsuits against state aid for Finnair, SAS, and Air France were thrown out of court. Photo: Getty Images.

Ryanair has repeatedly complained that airlines who receive state aid are being given an unfair advantage throughout the pandemic. The budget carrier says that giving state aid to failing airlines will allow them to emerge stronger from the medical emergency than those airlines who did not receive help.

Ryanair has won some cases

The court cases have not all gone against the Dublin-headquartered airline. So far this year, the General Court has ruled in favor of Ryanair in its challenges against aid given to German leisure airline Condor, Hollands KLM, and Portugal’s TAP. Challenges against state aid for Finnair, SAS, and Air France were all thrown out of court.

Condor exits proceedings healthy company
Ryanair won its case against Condor. Photo: Getty Images

Following the win over  the aid to Condor, Ryanair issued the following statement:

“The German government aid to Condor – both in 2019 and 2020 – went against the fundamental principles of EU law and has distorted the market to the detriment of consumers. Today’s ruling is an important victory for consumers and competition.”

“During the COVID-19 pandemic, over €30bn in discriminatory State subsidies have been gifted to EU flag carriers. Unless halted by the EU Courts in line with today’s ruling, the effects of market distortion caused by this State aid will be felt for decades. If Europe is to emerge from this crisis with a functioning single market, the European Commission must stand up to national governments and stop rubberstamping discriminatory State aid to inefficient national airlines.”

Ryanair can appeal to a higher court

Having now lost the case against Austrian Airlines, Ryanair can appeal to the EU Court of Justice (CJEU), Europe’s highest court located at the Palais de la Cour de Justice in Luxembourg.

So far, Ryanair has said nothing about the Austrian Airlines ruling, but if the past is anything to go by, we may receive a statement from Ryanair in the next few hours.

What do you think about Ryanair and its lawsuits against state aid for airlines? Please tell us your thoughts in the comments.