European judge: Air France-KLM should not have received state aid

Air France-KLM airline was not supposed to receive any support from the French government during the Corona period. The European Commission approved this, but according to the European Court of Justice it was unfair.

In 2020, many airlines faced bankruptcy as the coronavirus pandemic made flying nearly impossible. Later, many European countries decided to support their national airlines with multi-billion dollar packages.

The French government also did this with Air France. In April 2020, France guaranteed the airline a largely €4 billion bank loan, as well as an additional €3 billion in direct loans.

Almost a year later, in March 2021, Air France faced difficulties again. The government once again prepared a 4 billion euro aid package.

KLM also received billions of dollars

Air France is part of a holding company affiliated with KLM. KLM also received billions of dollars in support from the Dutch government. According to the European Commission, there was no unfair competition since the support of both governments applied only to the national airline.

However, the European Court is of the opinion that the Commission did not sufficiently investigate whether the Air France-KLM group, and KLM in particular, also benefited from the aid. The committee should have looked more closely at the relationships between the companies.

New victory from Ryanair

The case is another victory for airline Ryanair, which has stressed that European law does not allow discrimination based on nationality. According to the low-cost airline, member countries will be able to provide unlimited aid to protect their “national pride” with the approval of the European Commission.

Ryanair has filed several lawsuits in recent years. For example, Ryanair won a similar case against Lufthansa, which was confirmed by the German government. Ryanair also protested the Dutch government’s support for KLM in 2021, and initially it was right. The case is ongoing, so there is no final decision yet.

It is unclear what impact this decision will have. Air France repaid the last Corona aid to the French government in April this year, with KLM doing the same a few months later. The European Commission may also object.

Source: NOS