A top EU court on Wednesday again annulled the approval of a pandemic state aid program for Dutch airline KLM, handing a fresh victory to its Irish rival Ryanair.

The General Court ruled that the European Commission "erred" in approving the Dutch government's financial aid for the flag-carrier KLM, part of the Air France-KLM group.

KLM received 3.4 billion euros ($3.7 billion) from the Dutch state after the coronavirus pandemic grounded the aviation sector in 2020.

The court said the commission "erred in defining the beneficiaries" by excluding the group's holding company and Air France as recipients of that aid.

The commission, the EU's antitrust regulator, approved the aid in 2020, but the Luxembourg-based General Court annulled the decision the following year.

The commission then approved the aid again in 2021, which Ryanair challenged.

Ryanair launched several challenges against government bailouts for other airlines during the pandemic, including Germany's Lufthansa and Scandinavia's SAS.

Air France-KLM told AFP that its airlines "take note" of the decision.

"Air France-KLM and KLM will carefully study this judgment and assess its implications. They will consider whether to lodge an appeal," it said in a statement.

It added that the emergency loans had since been fully repaid with interest, making the financial consequences of the court's ruling uncertain.

Ryanair welcomed the court's decision as "a triumph for fair competition and consumers across the EU".

The Irish airline also said that total state aid to airlines approved by Brussels during the pandemic was 40 billion euros.

The EU court in December last year issued a similar decision, ruling that the commission "erred" in approving the French government's financial aid for Air France-KLM.

© 2024 AFP