Court rejects Ryanair’s lawsuit against Air France, SAS state aid

Budget airline Ryanair lost its legal fight in European court against state aid being granted to its European rivals Air France and Scandinavian Airlines (SAS). 

On February 17, 2021, the Luxembourg-based General Court of the European Union said the French and Swedish bailout schemes granted to their flag-carriers were in line with the European Union (EU) rules.

“That aid scheme is appropriate for making good the economic damage caused by the COVID-19 pandemic and does not constitute discrimination,” General Court of the European Union stated, reffering to the French aid scheme. 

As for Swedish aid scheme, European court said that “the scheme at issue is presumed to have been adopted in the interest of the European Union.”

However, on the same day, Ryanair announced that it would appeal EU court rulings on Air France and SAS state aid, indicating that the cases would be moving to the higher European Court of Justice. 

“The French scheme was reserved for French registered airlines and the Swedish scheme to Swedish registered airlines, while excluding all other EU airlines, which were also damaged by Covid-19, despite their contribution to connectivity, jobs, traffic growth and the wider economy in France and Sweden,” Ryanair statement reads.

In 2020, Ryanair had pursued legal actions to stop national bailouts being granted to European flag-carriers, saying that a nationality in a bailout scheme for certain airlines are incompatible with the single market idea and constitutes discrimination among airlines. 

Therefore, Ryanair asked the General Court to assess a French scheme allowing airlines to defer certain aeronautical taxes, and to rule on Swedish loan guarantee schemes for airlines.

“During the COVID-19 pandemic over €30 billion in discriminatory State subsidies has been gifted to EU flag carriers and, if allowed to stand, this will distort the level playing field in EU aviation for decades to come, giving chronically inefficient national airlines a leg up on their efficient low-fare competitors,” a Ryanair spokesperson said.