Ryanair loses Austrian state-aid case

Ryanair has lost a legal challenge against the provision of financial support to Austrian Airlines on state-aid grounds. In a ruling on 14 July, the General Court of the EU rejected a call from Ryanair and Laudamotion for the annulment of a E150m subordinated convertible loan to the Vienna-based carrier that had been provided by the Austrian government. The measure was part of a financial package of E600m which included a E300m loan from local banks and a E150m equity investment by parent company Lufthansa. On 6 July 2020, the EC approved the measure under its temporary state-aid framework, put in place to allow governments to compensate companies amid the Covid-19 pandemic. The court dismissed Ryanair and Laudamotion’s argument that the Commission had not examined all the aid measures granted to the airlines in Lufthansa Group or the relationship between them, and ruled that the aid did not constitute “overcompensation”. It says that under a deduction mechanism, applicable to all the measures adopted in favour of Lufthansa, the overall aid granted by Germany to the entire group was reduced by the aid granted by other states to a particular company within it, so that the overall amount received by the group remained the same. The Commission, it adds, had already taken into account all the aid measures granted to the airlines forming part of Lufthansa Group, including Austrian, and the relationship between them.<br/>