ECJ: Approval of AUA state aid was lawful

The European Court of Justice had to deal with a lawsuit brought by Laudamotion and Ryanair against the state aid that Austria had paid to Austrian Airlines at the beginning of the Corona pandemic. The competitors' appeal was rejected.

The "rescue package" consisted of a grant from the parent company Lufthansa, state-guaranteed loans that have since been repaid, and "non-repayable state aid" amounting to 150 million euros. Ryanair and its subsidiary Laudamotion, which is no longer active as an airline, have formally filed a lawsuit against the approval of this aid by the EU Commission.

The lower court, the Court of Justice of the European Union, has already decided that the release of state aid was lawful. Since Ryanair and Laudamotion took a completely different view, an appeal was lodged. This meant that the European Court of Justice had to deal with the matter. On Monday, July 29, 2024, the verdict was announced: the approval of the 150 million euro state aid for Austrian Airlines was found to be lawful. Since this is Europe's highest court, Ryanair and Laudamotion can no longer appeal.

State-guaranteed loan was repaid

The aid in question was only part of the “rescue package”, because a further 150 million euros were made available by the parent company Lufthansa. Austrian Airlines took out 300 million euros in the form of a loan, but the government at the time provided a state guarantee. This loan has since been repaid by Austrian Airlines. In contrast to Germany, Austria did not participate in the airline for which it was guaranteeing. This was very costly for the state financially.

The federal government under Sebastian Kurz has come under criticism for granting only Austrian Airlines a non-repayable subsidy of 150 million euros. Other airlines with Austrian AOC, such as Level Europe, Easyjet Europe, Eurowings Europe and Laudamotion, have have not received any such financial assistance from the stateThe first airline mentioned had to wait a few weeks file for bankruptcy after the start of the Corona pandemic and has since been completely wound up and dissolved. Eurowings Europe no longer exists as an Austrian airline, because the company was re-established in Malta and now operates under a Maltese license. The situation is similar at Laudamotion, as flight operations were completely taken over by the airline newly established Lauda Europe Ltd, which is also based in Malta.

Laudamotion received funding from Cofag

However, Laudamotion GmbH has not come away completely empty-handed when it comes to Corona subsidies. The federal government's transparency database shows that the Ryanair subsidiary received the following subsidies via Cofag: In 2021, it was 520.000 euros, in 2022 400.000 euros and in 2023 10.659.876,73 was transferred to Laudamotion.

At Austrian Airlines, the 150 million euros that the ECJ has now decided on the release of do not include the costs incurred by the employment service for the extremely long short-time work measure. This measure was used by numerous companies, including Level Europe and Laudamotion. The latter carrier introduced short-time work during a dispute with the union. but ended again after a few weeks.

At Level Europe, bankruptcy led to the end of short-time work. At Eurowings Europe, Austrian staff were also temporarily subject to this measure. Easyjet Europe was unable to make use of this for its flying staff, as it has neither pilots nor flight attendants stationed in the Alpine republic. Its competitor Wizz Air, which had a base in Vienna under Hungarian AOC at the time of the pandemic, set up a temporary short-time work scheme. no application for short-time workIn the meantime, the operation of the base was also taken over by a Maltese company, more precisely, Wizz Air Malta, replaced.