An EU court has dismissed Ryanair’s challenge to a decision by the European Commission to approve aid given by Finland to Finnair.

The Finnish state, the majority shareholder in the airline, announced in 2020 a plan to subscribe to an offering of new shares aimed at recapitalising Finnair, amid the downturn caused by COVID-19 restrictions.

The measure was approved by the European Commission under article 107(3)(b) of the Treaty on the Functioning of the European Union (TFEU), which provides that aid “to remedy a serious disturbance in the economy of a member state may be declared compatible with the internal market”.

Temporary framework

Ryanair had challenged that decision, arguing that the commission had waived the requirements of a temporary framework for state-aid measures introduced by the body in the wake of the economic disruption caused by COVID-19.

Ryanair had further argued that the commission should have conducted a formal investigation into the measure.

The General Court, however, ruled that the temporary framework “could not foresee all the measures that the member states might adopt” in the wake of lockdowns, and that it had subsequently been amended.

Market power

The judgment said that the mere fact that the commission derogated from the application of certain requirements of the framework “is thus not sufficient to demonstrate that the commission ought to have had doubts as to the compatibility of that measure with the internal market”.

The Luxembourg-based court also found that Ryanair had not provided any conclusive evidence that the commission’s assessment of Finnair’s market power would lead to doubts about the compatibility of the aid measure with the internal market.

Ryanair can appeal the decision to the EU’s highest court, the Court of Justice of the European Union.