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EU court overturns approval of SAS Covid bailouts

AFP
AFP - [email protected]
EU court overturns approval of SAS Covid bailouts
An SAS plane flies over clouds at sunset. Photo: SAS

An EU court on Wednesday overturned the European Commission's decision to approve massive government bailouts for Scandinavia's SAS airline during the coronavirus pandemic, after a legal challenge by rival airlines

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In 2020, the European Commission approved a bailout of just over one billion euros ($1.1 billion) for SAS from Sweden and Denmark. Lufthansa, in the same year received a multi-billion-euro cash injection to save it from collapse as the pandemic brought air travel to a halt.

In the case of Lufthansa, the EU General Court, Europe's second-highest court, said the commission "committed several errors", and annulled its decision to approve six billion euros of bailout funds.

The ruling was made in response to a complaint lodged by Irish airline Ryanair, which has long railed against what it sees as unfair aid paid out to rivals, as well as German charter airline Condor.

The court said mistakes included considering Lufthansa could not obtain financing on the markets, failing to require a mechanism incentivising Lufthansa to buy back Germany's shareholding, and potential impacts on market competitiveness.

The commission said in a statement it would study the judgement and "reflect on possible next steps".

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Given that Lufthansa paid back the bailout cash in 2021, it is not clear if the ruling would have any impact. The airline said it would analyse the decision and decide on further action, while noting the "stabilisation measures" were "already fully terminated before today's court ruling".

The court also ruled against the commission's decision on the aid for long-troubled SAS, in response to a complaint brought by Ryanair. The airline said it would examine the judgement and decide on possible courses of action.

The commission can appeal both rulings to the European Court of Justice. Ryanair welcomed the rulings on the  discriminatory state aid".

The bailouts "went against the fundamental principles of EU law", and the court's decisions were "a triumph for fair competition and consumers across the EU", a spokesperson said.

The Irish airline says over 40 billion euros was handed out in state subsidies to EU flag carriers during the pandemic.

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