European Court declares Air Europa rescue in Spain legal
The General Court of the European Union ruled that the 475 million euros ($ 578.8 million) of Spanish government loans granted to Air Europa (UX, Palma de Mallorca) last year were legal, dismissing a case Ryanair (FR, Dublin Int ‘) l) brought an action against the European Commission, which approved the aid.
The public funds, approved by Madrid in October 2020 and provided through the sovereign wealth fund (Sociedad Estatal de Participaciones Industriales – SEPI), were part of a € 10 billion ($ 12.2 billion) fund in Spain for businesses affected by the pandemic. the green light from the European Commission last July.
In its May 19 ruling, which is still open to appeal to the Court of Justice of the European Union, the General Court said the measure was in line with EU law and had been “proportionate and non-discriminatory ”. As previously reported, in two other judgments of the same day, the court agreed with Ryanair on state aid to KLM Royal Dutch Airlines (KL, Amsterdam Schiphol) and TAP Air Portugal (TP, Lisbon), rescinding the approvals of the European Commission flagged carriers loans of 3.4 billion euros ($ 4.15 billion) and 1.2 billion euros ($ 1.46 billion), respectively.
In the Spanish case, the Irish low-cost carrier had requested the cancellation of the SEPI fund for strategic companies hit by Covid. She argued that the fund was a discriminatory measure violating the right to freedom to provide services in the EU by only benefiting companies based in Spain. He also claimed that the commission erred in allowing Madrid to choose the beneficiaries at its discretion.
The court dismissed the claims, confirming that the measure complied with EU law, with the fund’s aim being to address the serious turmoil the pandemic has inflicted on the Spanish economy in the medium to long term.
The court declared that “the restriction of the regime in question to non-financial companies of systemic or strategic importance for the Spanish economy, established in Spain and having their principal establishment in its territory, is both appropriate and necessary in order to achieve the goal of remedying the serious disruption of the Spanish economy. “
In addition, Ryanair had failed to prove “how the fact of being deprived of access to the recapitalization measures covered by the scheme in question would prevent it from establishing itself in Spain or from providing services at destination and from Spain ”, indicates the judgment. In addition, the court dismissed Ryanair’s claim that the commission erred in considering the fund to be a state aid scheme as unfounded.
Air Europa and Ryanair were not immediately available for comment.