State aids and coronavirus. The General Court rules on the measures introduced by Sweden and Denmark for SAS

On 14 April 2021, the General Court of the European Union held its judgment in Cases T-378/20 and T-379/20, Ryanair DAC v European Commission, on the application for annulment of Decision C(2020) 2416 final of 15 April 2020 and Decision C(2020) 2784 final of 24 April 2020 by which the Commission classified the aid measures introduced by Sweden and Denmark for SAS AB(“SAS”) as State aid compatible with the internal market pursuant to Article 107(2)(b) of the Treaty on the Functioning of the European Union (TFEU)

Between 10 and 21 April 2020, Denmark and Sweden notified the Commission of two separate aid measures in the form of a guarantee on a revolving credit facility of up to 1.5 billion Swedish kronor (SEK) to compensate for SAS AB (“SAS”) for the damage resulting from the cancellation or rescheduling of its flights due to the travel restrictions amid the coronavirus outbreak. Since the Commission classified such measures as compatible with the internal market, Ryanair DAC (“Ryanair”) brought an action before the General Court asking for annulment of the decisions at issue and raising five pleas in law.

By the first plea in law, Ryanair claimed that the aids at issue were incompatible with the internal market since they were intended to make good the damage suffered by only one company. According to the Court, however, the Commission had not erred in law because an aid may be intended to make good the damage caused by an exceptional occurrence even if it benefits only an individual company, without making good the entirety of the damage caused by that occurrence. 

By the second plea in law, Ryanair disputed the proportionality of the aid measures in relation to the damage caused to SAS by the pandemic. According to the Court, however, the Commission had set out in sufficiently precise terms a calculation method for assessing the damage caused by the pandemic to SAS which, considering its evolving nature, was capable of avoiding the risk of possible overcompensation.

By the third plea in law, Ryanair claimed that the Commission infringed the principle of non-discrimination on the ground that the measures at issue offered more favourable conditions to companies established in Sweden and Denmark. According to the Court, however, the objective of the measures at issue not only aimed to make good in part the damage caused to SAS by an exceptional occurrence such as the coronavirus pandemic, but also the difference in treatment in favour of SAS was appropriate and did not go beyond what was necessary to achieve that objective, given that the latter has the largest market share in Denmark and Sweden, which is much higher than that of its closest competitor in both countries. 

By the fourth plea in law, Ryanair claimed that the examination conducted by the Commission was insufficient, in particular as regards the proportionality of the measures and their compatibility with the principles of the free provision of services and freedom of establishment. According to the Court, however, Ryanair did not demonstrate how the exclusivity of the aid measures was capable of discouraging it from establishing itself in Denmark or Sweden or providing services from either of those countries or to them. 

Lastly, the Court rejected the pleas claiming an infringement of the duty to state as unfounded.