EU: Unsuccessful Ryanair Action – AUA Loan Was Legal

Aug 30, 2024 Benn-Ibler Rechtsanwälte

Laudamotion and Ryanair have now definitively failed in their case brought before the European Court of Justice (hereinafter ECJ). In its latest decision, the ECJ ruled that the Covid-19 aid granted to Austrian Airlines by the Austrian government (and approved by the European Commission) was lawful.

On 23 June 2020, Austria notified the European Commission of an aid measure in the form of a subordinated loan of EUR 150 million (convertible into a grant) in favour of Austrian Airlines AG (AUA), which is part of the Lufthansa group. The purpose of that measure was to compensate AUA for the damage resulting from the cancellation or rescheduling of its flights owing to the COVID-19 pandemic outbreak. By decision of 6 July 2020, the European Commission approved the aid.

Ryanair and Laudamotion then challenged this decision before the General Court of the European Union. However, by judgment of 14 July 2021, the General Court dismissed the action brought by Ryanair and Laudamotion, finding that the aid at issue, offset against the subsidies granted by Germany to the Lufthansa group, did not overcompensate the latter. Consequently, Ryanair and Laudamotion appealed to the ECJ against the General Court’s judgment.

The CJEC has now dismissed this appeal, confirming the decision of the Commission.

A Member State may, for objective reasons, reserve aid intended to make good the damage caused by an exceptional occurrence to an individual company.

In addition, Ryanair and Laudamotion have not been able to demonstrate that the aid at issue constituted an obstacle on the freedom of establishment nor on the freedom to provide services. There is no evidence that the aid produced restrictive effects beyond those inherent in State aid.

ECJ C-591/21 P (29 July 2024)