Billions in aid for Air France-KLM legal according to EU Commission
Published: Wednesday, Jul 10th 2024, 15:00
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During the pandemic, the EU Commission allowed states to help airlines with billions. In two cases, the authority stands behind this, although a court sees it differently. However, the final word is still pending.
The EU Commission is of the opinion that the billions in state aid from France and the Netherlands for the airline Air France-KLM during the coronavirus pandemic was rightly approved. 10.4 billion euros in state aid for the airline group is compatible with the state aid rules of the international community, according to the Brussels authority.
The EU General Court recently ruled that the state funding permitted by the Commission in 2020 was unlawful. Now the case is going to the European Court of Justice. Following a similar ruling, the Commission is currently re-examining the billions in German aid for Lufthansa.
The EU Commission's approval in spring and summer 2020 reportedly involved a French state guarantee for loans amounting to 4 billion euros and a loan of 3 billion euros. The Netherlands provided support with a guarantee for loans of 2.4 billion euros and a loan of 1 billion euros.
Aid "necessary, appropriate and proportionate"
The General Court of the EU annulled both decisions of the European Commission in December 2023 and in February of this year. According to the General Court, the Commission had wrongly considered Air France and KLM to be the sole beneficiaries of the French and Dutch aid measures respectively. The Commission appealed against both judgments.
After re-examination, the Commission has now come to the conclusion that both measures are compatible with the applicable EU state aid rules. Furthermore, the combination of all French and Dutch measures did not lead to an incompatible cumulation of aid. The combined amounts remained below the applicable ceilings.
"The Commission concluded that the measures have contributed to addressing the economic impact of the coronavirus in France and the Netherlands." They were necessary, appropriate and proportionate.
Aid for Lufthansa again under the microscope
Last week, the EU Commission announced that it would re-examine billions in state aid for Swiss owner Lufthansa. An in-depth investigation is to clarify whether the German state aid from 2020, which has long since been repaid, was in line with European competition rules. The initiation of an investigation does not yet say anything about its outcome, the authority emphasized.
The background to this is also a ruling by the EU General Court. The judges ruled that the Commission should not have approved the German state aid amounting to around 6 billion euros. The officials had made several errors in their assessment, with the result that the Commission's approval was declared null and void.
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