Ryanair wins case against Italian state aid for airlines

Ryanair has won a case at the European General Court objecting to a €130 million state aid fund for airlines set up by the Italian government to help the sector during the Covid-19 pandemic.

The EU’s second-highest court struck down a decision by the European Commission to allow the aid measure. The court “annuls the contested decision”, a press release read.

The case is one of several that Ryanair has taken challenging subsidies granted to rival airlines during the Covid-19 pandemic, which were sharply criticised by chief executive Michael O’Leary. The courts have at times ruled against Ryanair but earlier this month it was victorious in a separate challenge over €6 billion in state aid provided to German flag carrier Lufthansa.

The Irish airline took the case against the European Commission, arguing it should have prevented Italy from granting the aid under the rules of the Single Market.

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The €130 million compensation fund could be accessed by Italian licensed airlines who paid their employees whose home base was in Italy and who were paid at least the minimum salary set down by a collective pay agreement.

When notified of the Italian government’s subsidy programme in October 2020, the Commission did not raise objections to the measure on the grounds that it was compatible with the internal market.

Ryanair took a case against the decision, arguing that the Commission’s lack of objection to the aid violated principles of European law that have underpinned the liberalisation of air travel since the late 1980s, including non-discrimination and the free provision of services.

Ryanair also accused the Commission of having made errors in its assessment of whether the aid was proportional to the damage caused by the pandemic, and failed to formally investigate.

The decision can be appealed.