Summary
- The General Court of the European Union has ruled that the Dutch government’s aid to KLM was illegal.
- The court found that not only KLM and its subsidiaries, but in addition the Air France-KLM holding company and Air France must have been included as recipients of the state aid.
- Ryanair, which challenged the choice, is asking for the Netherlands government to recuperate the illegal state aid from Air France-KLM and for the European Commission to take immediate motion to recuperate all illegal state aid provided in the course of the pandemic.
In one other ruling against state aid within the European Union, the General Court of the European Union, generally known as the General Court, said that the Dutch government’s aid to KLM was illegal. In 2020, the Netherlands granted KLM €3.4 billion ($3.6 billion) in the shape of a state-guaranteed bank loan and a state loan.
Air France and KLM group links
In its statement, the court highlighted that it initially annulled the European Commission’s approval in 2021, which it granted the yr before, saying that there was a failure to state reasons in regard to the determination of the beneficiary of the state aid in query (KLM).
In a follow-up decision, the EC said it had found the state aid compliant with internal market rules and that KLM and its subsidiaries, which include KLM Cityhopper, Martinair, and Transavia, were the only real recipients of the state aid in July 2021.
Photo: Flying Blue
Nevertheless, Ryanair brought forward the follow-up decision to the General Court, arguing its legality. On February 7, the court annulled the state aid again. It considered that the EC made an error in its July 2021 decision when it defined the recipients of the state aid because it excluded the Air France-KLM holding company and Air France, two firms forming the Air France-KLM Group.
The General Court concluded that not only KLM and its subsidiaries could have benefited from the help, but other firms inside the group, namely Air France-KLM Holdings and Air France. The court noted the advantages might have been indirect as well. The parties can still appeal the choice before the European Court of Justice (ECJ).
Photo: Ryanair
Oswell & Vahida, the law firm that represented Ryanair in court, argued that the state aid, which was a part of a €14.4 billion ($15.3 billion) liquidity package that improved the financial conditions of the Air France-KLM Group, was highly distortive. Moreover, it eroded the progress made during greater than three a long time of liberalization of air transport within the EU since it was only offered to flag carriers, de facto or de jure, by state governments.
In total, the law firm has now been involved in cases where it was successfully capable of overturn state aid collectively value greater than €26.7 billion ($28.7 billion), €18 billion ($19.3 billion) of which was overturned in 2023.
Top EU Court Upholds French & Swedish COVID Airline Aid Despite Ryanair’s Protests
The ECJ held up a lower court’s ruling that the state aid measures in France and Sweden were approved by the EC, which was challenged by Ryanair.
Recovering state aid from KLM
In an instantaneous response, Ryanair, which challenged the choice in front of the General Court, called for the Government of the Netherlands to recuperate The low-cost carrier also called for adequate remedies to repair among the damage attributable to state aid to the free market and competition inside the EU.
Ryanair highlighted that collectively, state governments handed out state aid value over €40 billion ($43 billion) in the course of the pandemic, calling it that were gifted to EU flag carriers. The airline reiterated that the EC must act immediately to recuperate the illegal state aid.
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