EU court annuls approval of state aid for KLM and TAP airlines

A top European Union court has annulled the EU’s approval of 3.4 billion euros (£2.9 billion) in state aid for the Dutch airline KLM but suspended its immediate application because of the impact of the Covid-19 pandemic on the industry.

In a similar ruling backing a challenge from Irish airline Ryanair, the court also overturned the EU’s decision to back state aid to the TAP Portuguese carrier for a potential total of 1.2 billion euros (£1 billion), but also suspended its application pending a new EU decision.

In both cases, the Luxembourg-based General Court said the European Commission had to come up with more complete reasoning on why such aid could be granted.

A Ryanair plane
Ryanair had argued that the aid constituted unfair state bailouts for national carriers (Armando Franca/AP)

The two rulings were a success for Ryanair, which had been stymied in its attempts to challenge before the court such state aid to other EU airlines.

The EU’s executive arm, the European Commission, which polices state aid and other competition issues, has approved several aid plans for struggling airline companies in the wake of the pandemic, especially after border closures and other restrictions halted most air travel.

Ryanair had argued that the aid constituted unfair state bailouts for national carriers.

The rulings of the General Court can be appealed against on points of law only.