Ryanair and Laudamotion’s case against the state AUA rescue in the wake of the corona pandemic was ultimately rejected. The European Court of Justice (ECJ) in Luxembourg ruled on Monday that the Republic’s aid of 150 million euros to Austrian Airlines (AUA) from 2020 is legal. Formally, the legal dispute concerns the question of whether the EU Commission is authorized to approve the aid.
Low-cost airlines Ryanair and Laudamotion sued the EU Commission’s decision, but already lost at the EU Court of First Instance (EuG) three years ago. Both airlines appealed to the ECJ. However, the ECJ judgment was upheld by the Court of Justice today.
Judges in Luxembourg ruled that a country “can, for objective reasons, allocate aid aimed at redressing damage caused to an entity by an exceptional event,” according to a press release from the ECJ. AUA is a much larger player in Austria and was more affected by the Covid-19 restrictions than Ryanair.
AUA was bailed out with a total of 600 million euros in June 2020 after the first wave of the pandemic. The 150 million euros at issue in today’s ruling went directly from the state treasury to the airline’s accounts and does not have to be repaid. The AUA has now repaid a 300 million euro loan, which the Republic took over. German AUA owner Lufthansa donated another 150 million euros at the time.
When it came to other state aid for airlines in Europe, the General Court had seen it differently in the past. In the past, an EU court has already ruled that German aid to AUA’s parent company Lufthansa and state aid from the Netherlands and France to their affiliated airlines KLM and Air France are illegal. As a result, the EU Commission recently announced that it is reviewing Lufthansa’s aid in Germany.