July 21, 2024 | 11:32


Judicial endorsement in Europe for financial support to Air Europa and Plus Ultra during the health crisis

Judicial endorsement in Europe for financial support to Air Europa and Plus Ultra during the health crisis

Jeickson Sulbaran

June 7, 2024 | 11:00 a.m.

European Justice supports the Spanish Government's 10.000 billion euro aid fund for companies affected by the pandemic

The Court of Justice of the European Union (CJEU) has put an end to the legal battle initiated by Ryanair against Spain regarding the aid fund of 10.000 million euros created in 2020. This fund, implemented by the Spanish Government and approved by the European Commission, The objective was to help national companies affected by the pandemic. The decision of the CJEU validates the legality and proportionality of this aid, which was managed through the State Society of Industrial Participations (SEPI).

The CJEU has concluded that the aid scheme did not violate the principle of non-discrimination on grounds of nationality and was proportional. The ruling emphasizes that Union Law allows differences in treatment between companies when it comes to aid intended to mitigate serious economic disturbances in a Member State.

The CJEU endorses the proportionality of Spanish aid

Specifically, this fund contributed 475 million euros to Air Europa and 53 million to Plus Ultra, two airlines that faced great economic challenges during the pandemic confinements. Ryanair argued that this aid distorted competition and favored national companies. compared to other European airlines, a claim that the CJEU has rejected.

Judicial endorsement in Europe for financial support to Air Europa and Plus Ultra during the health crisis

The European Court has noted that Ryanair could not demonstrate that the Spanish aid regime caused restrictive effects beyond those inherent to this type of aid. Furthermore, the CJEU emphasizes that the European Commission was not obliged to weigh the positive effects of the regime of aid in question with its negative effects on trade between Member States and competition.

The ruling highlights the exceptional nature and particular importance of the objectives pursued by the aid regime, ensuring a fair balance between its positive and negative effects on the internal market. In this way, the aid is considered to respond to the common interest of the European Union.

Ryanair's reaction has been critical, recalling other cases where the General Court of the EU ruled against similar state aid granted to airlines such as Air France, KLM, Lufthansa and SAS. The Irish airline accuses the European Commission of having failed to order the recovery of illegal aid or to have taken measures to remedy the damage to competition caused by several European governments.

Discrimination in the diets of stewards versus pilots

In a broader context, this CJEU ruling reaffirms the position of the European Union on the flexibility necessary to face severe economic crises like that caused by the pandemic. State aid, although subject to strict regulation, is a crucial tool to stabilize economies and strategic sectors in times of crisis.

In another relevant decision, the EU Advocate General issued his opinion on a labor dispute in airlines, where salary discrimination between cabin crew and pilots was reported. This case, brought to the CJEU by the National Court, analyzes whether there is discrimination in maintenance allowances between both groups, a situation not covered by the current collective agreement.

More news