A European Union court yesterday called into question the Ffr20 billion (£2.36 billion) French government bailout for Air France, saying the European Commission's approval for the aid was flawed.
Despite the legal setback, the EU's executive arm said the ruling did not mean that the French state-owned flag-carrier would have to repay the money, at least for now.
A source at the finance ministry also insisted that the decision would not affect the timing of a partial sale of the airline. France plans to float a portion of Air France later this year.
The Court of First Instance's ruling was welcomed by Air France's rivals which had challenged the Commission's backing of the aid as part of a restructuring of the airline. Ryanair also welcomed the decision.
Ryanair has separately filed a complaint against the Commission's approval of part of a £175 million payment made to Aer Lingus by the Government on the grounds that cost-saving targets were not met. But an Aer Lingus spokesman said that the airline is contending that the conditions were met.
