European Union Competition Law Developments in the Aviation Sector: July to December 2020

Abstract

The second half of 2020 has seen the aviation industry, and the world in general, continue to grapple with the seismic impact of the ongoing COVID-19 pandemic. This article summarizes the main developments over the past six months and provides the reader with greater detail of each of these developments. The European Commission (the ‘Commission’) has adopted a new Temporary Framework to enable Member States to grant further support and aid measures in response to the COVID-19 outbreak. Under the Temporary Framework, and subject to adherence to the criteria set out therein, Member States are able to take measures which are necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State. Given the on-going pandemic, and the resultant travel restrictions to control the spread of the virus, it is not surprising that a very significant number of State Aid measures have been enacted by Member States to support entities active in the aviation sector. While the majority of these measures have been directed towards aiding airlines, which have been hit particularly hard by the general fall in demand for air-passenger services and the travel restrictions, measures have also targeted for example ground handlers, airport operators and manufacturers of aviation parts. Similarly, the form of support offered has varied and included, for example, direct grants, loan guarantees, subsidized loans, tax and/or charges deferral schemes and wage subsidy schemes. The increased number of State Aid notifications to beneficiaries in the aviation sector has led to a similar increase in the number of legal challenges lodged at the EU Courts. Ryanair has been particularly active in challenging State Aid measures which it argues are illegal, and has signalled an intention to lodge further challenges still. Ryanair has taken particular umbrage with what it perceives as attempts by Member States to prop up their own national champions (e.g., operating the aid scheme by reference to the country in which the beneficiary holds an operating licence) at the expense of other competitors active in the Member State who have equally suffered as a result of the pandemic. aviation, airline, regulation, competition and anti-trust