Ryanair's fight against airline state aid faces court rulings

By Foo Yun Chee

BRUSSELS (Reuters) - Ryanair's fight against state aid for airlines will put loosened EU rules to the test on Wednesday when the bloc's second-highest court decides on support offered to Air France and SAS.

Under European Commission state aid rules loosened since the start of the pandemic, EU countries have offered more than 3 trillion euros ($3.65 trillion) in aid to companies in various sectors across the 27-member bloc.

In its first judgments on those rules, the Luxembourg-based General Court will assess a French scheme allowing airlines to defer certain aeronautical taxes. It will also rule on Sweden's loan guarantee scheme for airlines.

Ryanair, Europe's biggest budget carrier, has filed 16 lawsuits against the Commission, both against state aid to individual airlines such as Lufthansa, KLM, Austrian Airlines and TAP, as well as against national schemes that mainly benefit airlines.

Ryanair in its filings to the court faulted EU competition enforcers by allowing EU countries to grant aid only to airlines with EU operating licences issued by their countries.

EU flag carriers generally need only one operating licence from their home country to operate across the bloc.

Ryanair said the Commission also erred in assessing the proportionality of the aid to the damage caused by the pandemic.

Furthermore, the EU executive did not open a formal investigation into the schemes, thereby violating Ryanair's procedural rights and also failed in its duty to provide reasons for approving the schemes, it said.

The cases are T-238/20 Ryanair v Commission and T-259/20 Ryanair v Commission.

($1 = 0.8222 euros)

(Reporting by Foo Yun Chee; editing by Jason Neely)