Ryanair Secures Appeal Against Aid Scheme for Italian Airlines

Cleary Gottlieb successfully represented Ryanair before the EU General Court in winning its appeal against the European Commission decision authorizing an aid scheme of €130 million compensating airlines with an Italian operating license for damage suffered during the COVID-19 pandemic.

The scheme conditioned the eligibility of the aid on airlines applying to their employees whose home base was in Italy and to employees of third-party undertakings taking part in their activities remuneration equal to or higher than the minimum remuneration established by the national collective agreement applicable to the air transport sector.

The General Court annulled the aid measure finding that the Commission had failed to provide a statement of reasons for its finding that the aid scheme, insofar as it included the minimum remuneration requirement, was not contrary to provisions of EU law other than those governing State aid. In particular, the General Court relied on a complaint filed by the Italian Low Fares Airline Association, annexed to the application, which had previously challenged the compatibility of Italian rules providing for a minimum remuneration requirement similar to that included in the aid scheme at issue with the freedom to provide services (Article 56 TFEU).

The judgment mark the sixth time the EU General Court has annulled COVID-19 State aid measures, following the rulings in Cases T-34/21 (Lufthansa), T-238/21 (SAS), T-665/20 (Condor), T-643/20 (KLM) and T-465/20 (TAP).

Cleary is assisting Ryanair before the EU Courts in a total of 34 appeals against Commission decisions authorizing State aid granted by a number of Member States to rival air carriers during the COVID-19 pandemic.

The judgment for Case T-268/21 was issued on May 25, 2023.