Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious OutperformanceFind Stocks Now

Ryanair again wins court challenge against KLM's Dutch bailout

Published 02/07/2024, 03:52 AM
Updated 02/07/2024, 06:32 AM
© Reuters. FILE PHOTO: A Ryanair aircraft lands at Ciampino Airport in Rome, Italy December 24, 2016. REUTERS/Tony Gentile/File Photo

By Foo Yun Chee and Bart H. Meijer

BRUSSELS/AMSTERDAM (Reuters) -Ryanair on Wednesday won its second challenge against a 3.4-billion-euro ($3.7 billion) Dutch bailout for Air France-KLM's Dutch unit after an EU court ruled competition regulators had not taken into account all beneficiaries within the airline group.

Ryanair in 2021 won the same court's backing against the Dutch state aid, one of a score of challenges it launched after EU governments pumped billions of euros into the pandemic-hit airline industry.

The European Commission subsequently re-examined the case and again cleared it, saying that the state aid was necessary and proportionate. That prompted Ryanair to take its grievance back to the Luxembourg-based General Court, the EU's second highest.

Judges annulled the Commission's revised 2021 decision approving the state aid on Wednesday.

"The Commission erred in defining the beneficiaries of the state aid granted, by excluding from those beneficiaries the Air France-KLM holding and Air France, two companies forming part of the Air France-KLM group," judges said.

The Court said it had examined the capital, organic, functional and economic links between the companies in the Air France-KLM group, the contractual framework on the basis of which the measure at issue was granted, the type of aid measure and the context in which it was granted.

Judges said that on that basis, "the Air France-KLM holding and Air France were capable of benefiting, at least indirectly, from the advantage granted by the state aid in question".

KLM said it took note of the court ruling.

3rd party Ad. Not an offer or recommendation by See disclosure here or remove ads .

"KLM will study the verdict and will investigate further steps. KLM repaid the loans relating to the state aid in June, 2022. The credit facility was ended in April, 2023," the Dutch carrier said in a statement.

Ryanair welcomed the judgment and urged the EU competition watchdog to claw back what it said was more than 40 billion euros in discriminatory state subsidies to flag carriers.

"Today's judgment underlines the need for the European Commission to immediately act to recover these illegal state aid packages and order remedies to restore at least some of the damage done to competition," a Ryanair spokesperson said.

The EU executive said it would study the ruling and reflect on possible next steps.

The case is T-146/22 | Ryanair v Commission (KLM II; COVID-19).

($1 = 0.9293 euros)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.