EU Court Rules Against State Aid for Air France-KLM

EU court strikes down billions of euros in corona support for Air France-KLM

The European Commission should not have simply approved the state aid that Air France and parent company Air France-KLM received during the corona pandemic. The Court of Justice of the European Union ruled this on Wednesday in a case brought by budget airline Ryanair.

Court Ruling and Investigative Insufficiency

According to the court, the European Commission has not sufficiently investigated whether KLM benefited from the 11 billion euros in support that the French company and the holding company received from the French state. The Commission should therefore reconsider this.

Impact on Aviation Industry

Aviation had a hard time during the corona pandemic. Many airlines then received support from national governments. For example, Air France and parent company Air France-KLM together received 11 billion euros in support from Paris. This involved state guarantees and loans.

Ryanair’s Legal Challenge

The Irish airline Ryanair received no state aid and was angry that its competitors did. The company therefore started a series of lawsuits. In the case that the Irish started against French support, they have now been vindicated by the European court.

Reconsideration and Possible Appeals

According to the judge, KLM has at least indirectly benefited from the support from Paris. And that is against the rules, according to the EU court. The Commission should therefore not have simply approved the French state aid and must now reconsider whether KLM benefited from the French money. Air France-KLM can still appeal the ruling.

Dutch Government Support and European Commission Decision

The Dutch government also provided support to KLM during the corona pandemic. This involved 3.4 billion euros in loans and state guarantees. Ryanair also defended this and was ruled in favor by the European court. But the European Commission subsequently decided again that Dutch state aid was permitted.