COVID-19 Related State Aid for the Airline Sector: EU Courts Not Hesitant to Remove the Commission’s Stamp of Approval

Abstract

This article considers the significant amounts of State aid provided to European airlines in relation to the Covid-19 pandemic, three recent challenges in the EU General Court to the Commission’s decision to approve specific State aid measures and the consequences of those cases for the industry going forward. It is argued that the two successful challenges to Commission decisions approving aid are significant, because they confirm that the EU courts will not hesitate – despite the unprecedented financial damage to the airline industry caused by the Covid-19 pandemic – to annul Commission decisions approving aid where the reasoning is unsatisfactory. Equally, it is emphasized that the General Court did not find the State aid authorized by the Commission decisions in question to be unlawful as such, and the Court’s preferred remedy would suggest that the court was keen to avoid such an outcome, if possible. Furthermore, the principle of legitimate expectations would seem to render it unlikely that recipients of Commission-approved State aid will be required to repay that aid. Finally, it is argued that Covid-19 related State aid is liable to have caused some competitive distortions in the sector and that regulation of the industry needs to be attentive to this going forward. State Aid, EU Law, Covid-19, Airline Industry, Legitimate Expectations