Competition Law in Tourism

STATE AIDS TO AIRLINES DUE TO COVID-19 AND RYANAIR’S ACTIONS 719 after finding that the measure in question constituted State aid under article 107 TFEU by assessing its compatibility with the internal market, more precisely pursuant to article 107(3)(c) TFEU and the Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty (OJ C 249). As with other aid from the Member States to airlines, Ryanair argued that, unlike TAP (its main competitor in Portugal), it did not benefit from a State loan and was therefore penalised in terms of loan granting and the conditions governing loans, particularly as regards the interest rate. As mentioned, this decision differs from the previous ones, restricting itself exclusively to Ryanair’s argument concerning the lack of reasoning of the contested decision. Indeed, it does not go into the traditional pleas normally put forward by the low-cost airline in other appeals and this one as well. Ryanair referred to point 22 of the Guidelines: A company belonging to or being taken over by a larger business group is not normally eligible for aid under these guidelines, except where it can be demonstrated that the company’s difficulties are intrinsic and are not the result of an arbitrary allocation of costs within the group, and that the difficulties are too serious to be dealt with by the group itself. Where a company in difficulty creates a subsidiary, the subsidiary, together with the company in difficulty controlling it, will be regarded as a group and may receive aid under the conditions laid down in this point. According to its arguments, the Commission did not examine whether TAP’s difficulties were too serious to be resolved by the group itself, nor did it indicate whether any arbitrary allocation of costs within the group contributed to that result. Indeed, Ryanair pointed out that the two shareholders in the AGW consortium also operate in the transport field through their own companies and that it could not, therefore, be ruled out that they were favoured to the detriment of TAP’s financial position. The Commission did not state reasons, even brief ones, for the alleged lack of ability of the shareholders to cope with TAP’s difficulties. Nevertheless, article 296 TFEU explains that the statement of reasons must be appropriate to the nature of the measure in question and must disclose, clearly and unequivocally, the reasoning of the institution adopting the measure so that the interested parties may know the reasons and the competent court may exercise its examination power.

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