Ryanair loses a suit against Euro subsidies for flag carriers

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The budget airline Ryanair announced it had lost a case in court which was aimed at the mechanism of state aid for European flag carriers amid pandemic, Reuters reported. The Luxembourg-based General Court has ruled that financial aid targeted to offset the Covid-19 negative effects did not pose a discriminatory measure and therefore was no meant to hurt Ryanair’s interests.

Air France and SAS have received state funding to support their business. The judgment from the General Court is the first to deal with aid measures cleared by the European Commission under easier rules aimed at helping European Union governments prop up companies hit by the pandemic. The court said the French and Swedish schemes were in line with the bloc’s rules.

“That aid scheme is appropriate for making good the economic damage caused by the COVID-19 pandemic and does not constitute discrimination,” the court said quoted by Reuters, referring to the French scheme. Regarding the Swedish scheme, the court said: “The scheme at issue is presumed to have been adopted in the interest of the European Union.” Ryanair had taken issue with the European Commission for clearing a French scheme allowing airlines to defer certain aeronautical taxes and Sweden’s loan guarantee scheme for airlines. Both schemes benefited their flag carriers. Europe’s biggest budget carrier 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.

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