On 7 February 2024, the General Court of the European Union annulled the decision of the Commission of 16 July 2021 approving State aid from the Netherlands amounting to EUR 3.4 billion in favour of KLM (T-146/22, KLM II; Covid19)
In 2020, the European Commission had decided that the State aid to KLM consisting of a State guarantee for a bank loan and a State loan were compatible with EU State aid rules and in particular the State Aid Temporary Framework in the context of the Covid19 pandemic (Decision 1)
However, in May 2021, following a first action by Ryanair, the General Court annulled Decision 1 for insufficient reasoning concerning the definition of the beneficiary of the measure in question (see Judgement 1).
Subsequently, on 16 July 2021, the Commission took a new decision (Decision 2), in which it again found that the State aid was compatible. The Commission concluded that KLM and its subsidiaries were the sole beneficiaries of the aid, thereby excluding other companies in the Air France-KLM holding.
Following a further action by Ryanair, the General Court has now also annulled Decision 2 (Judgement 2). The Court found that the Commission was manifestly wrong to determine that only KLM benefited from the aid in question. Based on thorough analysis of the capital, organic, functional and economic links between the Air France-KLM holding company, Air France and KLM and their respective subsidiaries, as well as other factors (type of aid, context, etc.), the General Court concluded that both the Air France/KLM holding company and Air France could benefit, at least indirectly, from the measure.
For more information, please see the General Courts judgment: EUR-Lex - 62022TJ0146 - EN - EUR-Lex (europa.eu)