Commission backs Covid state support to Air France-KLM for a second time

Air France-KLM has welcomed a fresh decision by the European Commission confirming the legality of state financial support given in response to the Covid-19 pandemic, after its originally approval decision was successfully challenged on appeal. The Commission had originally backed E7b and E3.4b worth of French and Dutch government support packages in May and June 2020, respectively, adjudging both to be compatible with state aid laws – including the rules temporarily relaxed during the pandemic. However judges of the European Union’s General Court last December annulled a decision approving French state aid to Air France, after ruling that other companies of its parent group should have been considered as beneficiaries. It similarly annulled the Dutch support scheme to KLM in February this year for the same reason. Both decisions followed challenges brought by Ryanair and its Malta Air subsidiary. The Commission, as well as Air France-KLM, appealed that decision – a ruling on which is still to come. European competition commissioner Margrethe Vestager today says: ”Following the General Court judgements annulling the initial decisions, the Commission has found that E10.4b in liquidity support to the Air France-KLM Group complies with state aid rules. The Air France-KLM Group required the state guarantee and the state loan to obtain vital liquidity to face the difficult coronavirus period and they were granted in line with the Temporary Framework, irrespective of the definition of the beneficiary.”<br/>