The Court of Justice of the European Union (CJEU) has this Thursday overturned a prior ruling by Community justice that had invalidated the rescue authorization of €3.4 billion granted by the Netherlands to the airline KLM amid the Covid19 crisis. This decision implies that the EU’s highest judicial body will have to rule on the case for the third time since the aid was approved in 2020.
In 2020, the European Commission gave its approval for the injection of public funds into the Dutch company to compensate for losses arising from travel restrictions during the pandemic. However, the Irish low-cost airline Ryanair challenged this Brussels decision before European justice.
The General Court of the EU, based in Luxembourg and acting as the first instance, initially annulled the Commission’s permit. After this setback, the Community Executive reviewed and adjusted its resolution, specifying that approval of the aid was based on the fact that KLM and its subsidiaries were the only beneficiaries, leaving out other companies in the Air France-KLM group. Despite this, Ryanair lodged a new appeal against this second decision and the General Court again ruled in favor of the Irish company, cancelling the rescue once more, which has now reached the CJEU on appeal.
In the judgment handed down this Thursday, the European High Court invalidates the ruling that had annulled the aid for the second time, but only partially upholds the appeal filed by Ryanair. In this way, the matter returns to the General Court for a third review, considering that the CJEU this instance incurred an error of law when it declared that the Commission manifestly erred in determining that KLM and its subsidiaries were the only beneficiaries of the measure at issue.