European Court Annulls Covid-19 State-Aid Approvals by Air France-KLM

Air France-KLM is contemplating whether to appeal against the European court's decision to annul the European Union approvals of France's state-aid measures amid the Covid-19 pandemic.

The Franco-Dutch airline group, in a statement released on Thursday, expressed its intention to thoroughly evaluate the judgments issued by the General Court of the European Union earlier this week and analyze their implications.

The court ruled that the European Commission's approval of financial aid from the French government to Air France and Air France-KLM in relation to the Covid-19 crisis had been annulled. This decision pertained to state guarantees provided by France to Air France in 2020, covering loans from banks and shareholders, as well as France's involvement in Air France's recapitalization in 2021, along with its holding company Air France-KLM.

Although the European Commission, the EU's antitrust enforcer, had initially deemed these measures acceptable, Ryanair and Malta Air contested the decision. Consequently, the court invalidated the European Commission's ruling, citing an incorrect definition of the beneficiaries of the state aid.

Air France-KLM and Air France acknowledge the court's judgments. While they assess the possibility of appealing, they also intend to engage in discussions with the French government and the European Commission with the aim of obtaining new approvals, if necessary, as stated by Air France-KLM.

Furthermore, Air France-KLM assures compliance with all requirements and obligations related to the previous state aid received.