EU court annuls approval of KLM, TAP aid, wants more info

A top European Union court has annulled the EU’s approval of 3.4 billion euros ($4.1 billion) in state aid for the Dutch carrier KLM

Europe Airlines (Copyright 2019 The Associated Press. All rights reserved)

A top European Union court on Wednesday annulled the EU's approval of 3.4 billion euros ($4.1 billion) in state aid for the Dutch carrier KLM but suspended its immediate application because of the impact of the COVID-19 pandemic on the industry.

In a similar ruling backing a challenge from Irish air carrier Ryanair the court also overturned the EU's decision to back state aid to the TAP Portuguese carrier for a potential total of 1.2 billion euros, but also suspended its application pending a new EU decision.

In both cases, the Luxembourg-based General Court said that the European Commission had to come up with more complete reasoning why such aid could be granted.

The two rulings were a success for Ryanair which had been stymied in its attempts to challenge before the court such state aid to other EU airlines.

The EU’s executive arm, the European Commission, which polices state aid and other competition issues, has approved several aid plans for struggling airline companies in the wake of the pandemic, especially after border closures and other restrictions halted most air travel.

Ryanair had argued that the aid constituted unfair state bailouts for national carriers.

The rulings of the General Court can be appealed on points of law only.