COVID-19: The General Court Of The EU Dismisses Ryanair's Appeals Against Aid Granted To Finnair And SAS

• Published date: 26 May 2021
• Subject Matter: Litigation, Mediation & Arbitration, Strategy, Coronavirus (COVID-19), Trials & Appeals & Compensation, Economic Analysis, Government Measures, Litigation, Contracts and Force Majeure
• Law Firm: CMS Law-Now
• Author: Annabelle Lepièce and Rapha'l Brochier

On 14 April 2021, the General Court of the EU, seized by several annulment actions brought by Ryanair, considered that the guarantees given by Finland to Finnair (Case T-388/20) and the guarantees given by Sweden (Case T-379/20) and Denmark (Case T-378/20) to SAS complied with the European rules on State aid.

After the dismissal of the actions for annulment brought by Ryanair against the decisions of the European Commission approving aid schemes in favour of French and Swedish airlines, the General Court confirmed on 14 April 2021 the legality of the Commission's decisions authorising individual support measures in favour of airlines which were founded on distinct European legal bases.

1/ the Finnair case

On 13 May 2020, Finland notified to the European Commission a project of aid in the form of a public guarantee in favour of the Finnish airline Finnair to support the company in the context of the COVID-19 crisis. The objective of the guarantee was to help Finnair obtain a EUR 600 million working capital loan to cover its liquidity needs. The guarantee had a coverage of 90% of the loan and was limited to a maximum duration of three years. In its notification, Finland demonstrated that all other potential means of obtaining liquidity from the markets had already been explored and exhausted.

On 18 May 2020, the Commission considered, on the basis of its Temporary Framework on State aid measures to support the economy in the current context of the COVID-19 outbreak, that the Finnish guarantee was compatible with EU law, in particular with Article 107.3, b) TFEU. Under this provision, aid to remedy a serious disturbance in the economy of a Member State may, under certain conditions, be considered compatible with the internal market.

On 26 June 2020, the airline Ryanair filed an action for annulment against the Commission's decision before the General Court of the EU and requested the accelerated procedure.

For the first time, the General Court is examining the legality of individual aid approved in the context of COVID-19 under Article 107.3, b) TFEU.

First, the General Court analyzed the contested decision from the perspective of Article 107.3, b) TFEU.

According to Ryanair, the Commission misapplied Article 107.3, b) TFEU. Indeed, the Commission wrongly considered that the individual aid granted to Finnair responded to a serious disturbance of the Finnish economy. Moreover, the Commission did not respect the obligation to balance the beneficial effects of the aid against its negative effects on trading conditions and the maintenance of undistorted competition.

First of all, the General Court recalls that Article 107.3, b) TFEU applies both to aid schemes and to...