COVID-19: General Court dismisses Ryanair’s action against Commission Decision on State aid granted to Polish airline
The General Court (GC) has rendered its judgment in case Ryanair and Ryanair Sun v Commission (T-398/21), concerning an action for annulment against Commission Decision of 22 December 2020 on State aid SA.59158 (2020/N).
In the concerned Decision, the Commission approved a EUR 650 million aid scheme for Polskie Linie Lotnicze ‘LOT’ S.A., a Polish airline, to support it during the COVID-19 pandemic. The aid consisted of a subsidised loan of PLN 1.8 billion (EUR 400 million), and a capital injection of EUR 250 million.
The applicants raised five pleas alleging (i) the misapplication of the Temporary Framework, (ii) the misapplication of Article 107(3)(b) TFEU, (iii) the infringement of the principles of non-discrimination, the freedom to provide services, the freedom of establishment, and of Regulation (EC) 1008/2008 on common rules for the operation of air services in the Community, (iv) that the Commission should have initiated the formal investigation procedure, and (v) the breach of the obligation to state reasons.
The GC found that the Commission did not make a manifest error in determining that LOT was not an undertaking in difficulty as of 31 December 2019, according to Article 2(18) of the General Block Exemption Regulation (GBER). Regarding the applicants’ claim that the Commission failed to consider less distortive alternatives to LOT’s recapitalization, the Court acknowledged that EU case law requires choosing the least restrictive measure when multiple options exist. However, it found no evidence that the Commission had made such a choice in this case.
The Court ruled that, contrary to the applicantss assertion, the Commission had sufficiently demonstrated LOT’s significance to the Polish economy and that the aid in question helped address the serious economic disruption in Poland, as required by Article 107(3)(b) TFEU. The GC thus rejected Ryanair’s action in its entirety.
For more information, see the GC’s judgment.