EU Top Court Restores Covid Aid Approvals for KLM and Condor

The EU's highest court on Thursday scrapped earlier rulings that had annulled billions in pandemic-era state aid for airlines KLM and Condor. The European Court of Justice (ECJ) delivered the final word in a legal fight that Ryanair started years ago. And the low-cost carrier walked away with, at best, a partial rematch.

What did the ECJ decide?

The Luxembourg-based ECJ overturned judgments of the EU General Court, the lower court chamber, which had sided with Ryanair and voided two European Commission aid approvals.

In Condor's case, the ECJ went furthest. A press release from the court said the judges "dismissed Ryanair's action in its entirety." That ends the challenge against the German aid package.

KLM's case got a split result. The ECJ dismissed Ryanair's action in part and referred the case back to the General Court. The lower court must now rule on the part of Ryanair's action it never assessed in its previous judgment.

Where did the money come from?

The dispute traces back to the earliest weeks of the pandemic, when governments scrambled to keep national carriers flying.

• In 2020, the European Commission approved a Dutch government request to support KLM with €3.4 billion ($3.8 billion) in state aid.
• In 2021, the commission cleared a request from Germany to grant Condor €321 million.

State aid, in EU law, means government support to companies that could distort competition in the single market. The Commission polices it and must approve large packages.

Ryanair, the Irish low-cost airline, challenged both approvals before the General Court. It won there in both cases. The General Court annulled the Commission's decisions. KLM and Condor then appealed to the ECJ.

Why does the ruling matter?

Thursday's judgments reset the scoreboard. The General Court's annulments are gone. The Commission's original approvals now stand on firmer ground.

For competition practitioners, the KLM referral is the live issue. The case returns to the General Court, meaning more briefing, more hearings and more delay. Think of it as a football match sent to a replay rather than a final whistle. Ryanair keeps a narrow path to challenge part of the Dutch package, but the bulk of its case has failed.

The Condor ruling, by contrast, is final. Ryanair lost on every count. The German holiday carrier can close the file.

There is a practical footnote too. Condor told the German news agency dpa earlier that it has since repaid the state aid at the centre of the proceedings. So the ruling settles the law more than the money in that case.

What's the bigger picture?

The twin disputes form part of a wider pattern. Ryanair has fought pandemic bailouts for rivals across Europe, arguing that national aid schemes tilted the market against competitors based in countries that gave less generous support.

The ECJ's intervention signals that the Commission's crisis-era approvals can survive judicial scrutiny. That matters for any future emergency aid programme. Governments and recipients will read Thursday's outcome as reassurance that speed-of-pandemic decision-making can hold up on appeal.

For Ryanair, the record is now mixed at best. It won twice at the General Court. It has now lost one case outright at the top court and lost most of the second.

For KLM, the remaining question is narrow. The General Court must examine only the part of Ryanair's action that its earlier ruling left untouched. The core of the €3.4 billion package has survived the ECJ's review.

The ECJ issued its decisions on Thursday. The KLM remand will return to the General Court in due course.