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EU court rules for Ryanair in pandemic aid dispute with Brussels

The Irish budget airline has challenged several bailout packages for flag carriers approved by the European Commission during the pandemic.

LUXEMBOURG (CN) — No-frills airline Ryanair is flying high after prevailing against the European Union before the bloc’s second-highest court in a fight over billions in Covid-19 support for competitors. 

The European General Court found on Wednesday that the European Commission made “several errors” when it approved a 6 billion euros ($6.6 billion) aid package for German flag carrier Lufthansa in June 2020.

Strict EU competition regulations prevent governments from bailing out their own industries, but requirements were loosened during the global pandemic as countries moved to prop up sectors hardest hit by lockdowns and travel restrictions.

The Luxembourg-based court found fault specifically with an assumption by the commission, the EU's executive body, that Europe’s largest airline would have been unable to find financial support from other sources and found that Lufthansa did not pay Berlin back fast enough.

“The contested decision is vitiated by several errors or irregularities,” the five-judge panel wrote. 

Ryanair brought the complaint together with German leisure airline Condor. The pair were able to show that propping up Lufthansa negatively impacted their bottom line as they were competing on multiple routes.

The German state paid 300 million euros ($328 million) for a 20% stake in Lufthansa as well as making two loans totaling 5.7 billion euros ($6.2 billion.) The company has already reimbursed Berlin for the aid, limiting the impact of the ruling. The decision could, however, influence how future state aid applications are handled by Brussels. 

In a separate decision on Wednesday, the same court annulled Brussel’s greenlight of similar aid to SAS, after Denmark and Sweden approved 1.07 billion euros ($1.17 billion) in support to the Scandinavian airline in August 2020.

Ryanair has contested more than a dozen decisions by the commission to approve bailout packages for flag carriers across Europe. The Dublin-based airline received no financial support of its own during the crisis. 

The company applauded the court's decision in an emailed statement, calling it “a triumph for fair competition and consumers across the EU." Ryanair claims the EU has approved more than 40 billion euros ($43 billion) of what it calls “unjustified subsidies” for airlines. 

Lufthansa noted in an emailed statement that it had already repaid the money and “will analyze the ruling and then decide on further action.”

The commission could appeal to the EU’s highest court, the European Court of Justice. 

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