HomeAir LineEuropean justice knocks down KLM's €3.4 billion bailout for the second time

European justice knocks down KLM’s €3.4 billion bailout for the second time

The General Court of the European Union (TGEU) has again annulled the 3.4 billion bailout of the airline KLM, which was authorized twice by the European Commission in the context of the coronavirus pandemic and appealed both times by Ryanair.

In 2020, the European Comission approved Dutch state aid for KLM, consisting of a state guarantee for a bank loan and a state loan. The total aid budget amounted to 3.4 billion euros. The aim of the measure was to temporarily provide KLM with liquidity in the context of the COVID-19 pandemic.

However, in 2021, This aid was appealed by Ryanair and the General Court annulled the Commission’s decision for “lack of motivation regarding the determination of the beneficiary of the measure in question.” Furthermore, it decided to suspend the effects of the annulment until the Commission adopted a new decision.

For the second time, Europe knocks down the rescue of KLM at the request of Ryanair. Source: Hosteltur.

A sentence of comings and goings

Subsequently, also in 2021, the Commission adopted a new decision in which it considered that the State aid was compatible with the internal market and that KLM and its subsidiaries were the only beneficiaries of the aid, to the exclusion of the other companies in the Air group. France-KLM.

The ruling of the TGEU, again at the request of Ryanair, once again annuls the approval of the aid in question. It estimates that the Commission “erred in the definition of the beneficiaries of the State aid granted by excluding the holding company Air France-KLM and Air France, two companies that are part of the Air France-KLM group”.

European justice annuls aid to Air France and the group in the pandemic

In this sense, the European High Court examines the capital, organic, functional and economic links between the companies of the Air France-KLM group, the contractual framework on the basis of which the measure in question was granted, as well as the type of aid measure. granted and the context in which it was inscribed. On this basis, it concludes that the Air France-KLM holding company and Air France could benefit, at least indirectly, from the advantage granted by the State aid in question.

Ryanair war

This is not the first time that the Irish company intervenes – sometimes, with other airlines – in the granting of aid that was made by some states to overcome the adverse effects of the pandemic.

In May of last year, the TGUE also annulled the bailout of Lufthansa of 6,000 million euros, ruling in favor of the appeal presented by Ryanair and Condor. An appeal that adds to the one made at the time to cancel aid to Air France, Finnair or SAS. Aid for Michael O’Leary’s airline, he estimated at more than 30,000 million euros and which he described as “discriminatory.”

Related news:

-The European Court annuls the €6 billion Lufthansa bailout approved by the EC

– European airlines in trouble

– Air France will receive a €7 billion loan from the French State

Source: Hosteltur

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