Ryanair recently won a legal battle against European Commission objecting to a $140 million state aid fund set up by the Italian government for the airline during the COVID-19 pandemic. The European Court of Justice ruled in favour of Ryanair stating that the competition enforcer did not provide sufficient reasoning for its decision asking why it had not opened an investigation.
"According to settled case law, a decision not to initiate the formal investigation procedure in respect of notified aid must set out the reasons for which the Commission takes the view that it is not faced with serious difficulties in assessing the compatibility of the aid at issue with the internal market. The General Court finds that that has not been done here,” the Court said in a statement.
This case is one of the multiple legal cases Ryanair has filed against the aid its European rivals received. The case sought to overturn a decision by the European Commission which approved the clearing of €130 million in state bailout by the Italian government in subsidies to certain airlines holding an Italian license during the height of the pandemic.
During the pandemic, European Union approved billions of euros in bail-out packages for affected airlines
In October 2020, the European Commission approved the Italian government to distribute €130 million in state aid to certain airlines holding an Italian license under certain conditions.
In order to receive the aid, airlines were mandated to pay their employees and employees of third-party companies involved in their operations. Air Dolomiti, Blue Panorama, and Neos met the requirements and were awarded the aid, but Ryanair was excluded from the package.
Believing the aid violated principles of European law, Ryanair appealed to the European Union General Court in 2021. The carrier argued that under the rules of the Single Market, the European Commission should have prevented the Italian government from distributing the aid.
The impact of the ruling is unclear, but the airlines would have to pay the money back
The case against the approval of Italian state aid is one of the multiple cases Ryanair has appealed against aid cleared by the Commission for its rivals.
Two weeks ago, in a case brought by the low-cost giant, the EU General Court ruled in favor of Ryanair involving state aid during the pandemic to rival carriers SAS and Lufthansa. The Court annulled the Commission's clearance of a €1 billion bailout to SAS and €6 billion to Lufthansa.
Following the judgments, a Ryanair spokesperson commented: "One of the EU's greatest achievements is the creation of a single market for air transport. The European Commission's approval of the aid scheme limited to airlines with an operating license issued by the Italian State went against the fundamental principles of EU law. Today's judgment confirms that the Commission must act as a guardian of the level playing field in air transport and cannot sign off discriminatory State aid under political pressure by national governments. The Court's intervention is a triumph for fair competition and consumers across the EU. "
"During the Covid-19 pandemic, over €40bn in discriminatory State subsidies has been gifted to EU flag carriers. Unless halted by the EU Courts in line with today's ruling, this State aid spree will distort the market for decades to come. Europe's emergence from the Covid-19 crisis with a functioning single market depends on airlines being allowed to compete on a level playing field. Undistorted competition eliminates inefficiency and benefits consumers through low fares and choice. Unjustified subsidies, on the other hand, encourage ineffectiveness and will harm consumers for decades to come,” the spokesperson added.