Ryanair loses EU court fight over Italy's Covid airline aid

A European Union court on Wednesday dismissed Ryanair's appeals against an Italian state aid scheme that compensated airlines for losses during the Covid-19 pandemic.

The General Court of the European Union, the bloc's second-highest court, rejected the Irish carrier's challenge to the €3 billion Italian fund, which covered ticket refunds and other costs for airlines operating in the country. Ryanair had argued the scheme gave an unfair advantage to Italian carriers, including Alitalia, by compensating them for losses the budget airline said were not directly tied to the pandemic.

The court ruled that the Italian measure was a legitimate response to an exceptional economic disruption and did not constitute illegal state aid. The judges found that the compensation was limited to losses directly caused by the pandemic and was available to all airlines meeting the criteria, not just Italian ones.

Ryanair has been one of the most aggressive litigants against state aid in European aviation, filing multiple challenges against government support for flag carriers during the pandemic. The airline has argued that such bailouts distort competition and prop up inefficient carriers that would otherwise fail.

The ruling is a setback for Ryanair's broader legal strategy. The airline has also challenged state aid to Air France, KLM, Lufthansa, and Scandinavian carrier SAS, with some cases still pending. The European Commission, which approved the Italian scheme in 2020, welcomed the court's decision.

Ryanair said it was reviewing the judgment and would consider an appeal to the European Court of Justice, the EU's highest court. The airline has 2 months and 10 days from the ruling to file an appeal on points of law.