EU Commission: Billions in aid for Air France-KLM was legal
The EU Commission has once again examined whether aid for Air France-KLM was in order. Ryanair is once again losing out.
(Image: Air France-KLM)
The Dutch and French state aid for the airline Air France-KLM during the coronavirus pandemic was legal. This is the opinion of the European Commission after it re-examined the aid it approved in 2020 totaling 10.4 billion euros. It was forced to do so after the Court of Justice of the European Union declared the approvals null and void.
During the pandemic, the EU Commission adopted a "Temporary COVID-19 Framework" in March 2020. EU member states should be able to support companies that were struggling with liquidity bottlenecks, such as airlines. They were also able to compensate companies for losses incurred directly as a result of the coronavirus crisis.
Against this backdrop, France supported Air France-KLM with a guarantee for bank loans amounting to EUR 4 billion and a loan of EUR 3 billion. The Netherlands provided a loan guarantee of EUR 2.4 billion and a loan of EUR 1 billion, which the EU Commission approved in May and July 2020. The Irish airline Ryanair took legal action against this and was successful; the EU court revoked the approvals in December 2023 and February 2024.
"Remedy significant disruption to the economy"
In February of this year, Ryanair commented that the state aid was discriminatory and therefore illegal. In this context, Ryanair described the EU Commission as spineless. During the coronavirus pandemic, it had allowed EU member states to issue blank checks to "zombie airlines" in the name of fading national prestige.
According to the Commission, it has reassessed the aid. The aid is also compatible with the internal market on the basis of the Temporary COVID-19 Framework or directly on the basis of the Treaty on the Functioning of the European Union (TFEU). They were appropriate, necessary and proportionate to remedy a serious disturbance in the economy of these Member States. The combination of all aid did not lead to incompatible cumulation, as the total remained below the ceilings set in the Temporary Framework.
Ryanair has calculated that 40 billion euros in aid flowed to airlines during the pandemic. The EU Court has also annulled approvals by the EU Commission for other companies, including SAS and Lufthansa. The Lufthansa case involves aid totaling 9 billion euros, which the EU Commission is now re-examining.
(anw)
