Luxembourg — A European Union court has annulled the approval for state aid granted to Italian airlines worth €130 million ($140 million) during the Covid-19 pandemic in a ruling on Wednesday.
The EU General Court cancelled the European Commission's approval after finding that the basis for compatibility with EU law had not been sufficiently justified, according to a statement.
Budget airline Ryanair filed the complaint against the state support from Italy. It follows a similar court decision taken against German state aid awarded to German airline company Lufthansa.
The €130 million in funds was intended to compensate the airlines for damages suffered as a result of Covid-19-related travel restrictions.
According to the EU General Court, the commission should have either explained why the competition authority had no issue with the state aid or started an investigation.
State support is usually closely regulated, however restrictions were loosened during the pandemic. The commission is the bloc's top authority on competition matters and approves state subsidies.
The ruling may be appealed at the European Court of Justice ( ECJ), the bloc's highest court.
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