A TOP EU court has annulled a pandemic state aid programme for Air France-KLM that had been challenged by rival Ryanair and Malta Air.

The General Court ruled that the European Commission “erred” in approving the French government’s financial aid for Air France-KLM.

The group received billions of euros from the state after the pandemic grounded the aviation sector in 2020 – money that has since been reimbursed, with interest.

The court noted that Ryanair and Malta Air had argued that the measures were “contrary to EU law”.

The two airlines said the commission had “incorrectly defined the beneficiaries” by deciding that neither the group’s holding company nor Dutch airline KLM were recipients of that aid.

Air France-KLM said it took note of the ruling.

“Air France-KLM and Air France will carefully study these judgments and assess their implications,” the group said in a statement.

“They will consider whether to lodge an appeal on points of law before the Court of Justice of the European Union,” the statement said.

Ryanair has welcomed the ruling. 

“One of the EU’s greatest achievements is the creation of a true single market for air transport,” a Ryanair spokesperson said. 

“The European Commission’s approval of the French State aid to Air France-KLM went against the fundamental principles of EU law, like the principle of non-discrimination on the basis of nationality,” they said.

“Today’s judgments confirm that the Commission must act as a guardian of the level playing field in air transport and cannot sign-off discriminatory State aid issued by national governments. The Court’s intervention is a triumph for fair competition and consumers across the EU.”

The General Court previously sided with Ryanair in May in a case against massive government bailouts for German airline Lufthansa and Scandinavia’s SAS during the pandemic.

- © AFP 2023 with reporting by Hayley Halpin