Irish low-cost carrier Ryanair scored two major victories on Wednesday when Europe's second-highest court ruled that billions of dollars in state aid granted to rivals KLM and TAP were not properly carried out.  

The Luxembourg-based EU General Court said the European Commission, which signed off on the state aid, failed to adequately justify the bailouts. 

Brussels approved $4.15bn in aid for KLM from the Dutch government and a $1.5bn rescue loan for Portugal's TAP last year as airlines around the world were grounded and fighting to keep their heads above water at the height of the COVID-19 pandemic.  

"The European Commission's approvals of state aid to Air France-KLM and TAP went against the fundamental principles of EU law and reversed the clock on the process of liberalization in air transport by rewarding inefficiency and encouraging unfair competition," Ryanair said following the ruling. 

 

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While the court "annulled" the aid granted to both carriers, it suspended the annulments and recovery of the money pending a new decision by the European Commission. Brussels now has two months to reply. 

"What we will do now is study the judgments and reflect on possible next steps," said Commission spokesperson Daniel Ferrie during a daily press briefing in Brussels.  

Ryanair lost a separate challenge on Wednesday against a $12bn Spanish solvency fund to support pandemic-hit companies. The court said the scheme was "proportionate and non-discriminatory." 

The Irish carrier filed at least 16 challenges to EU state aid approvals after the Commission relaxed state aid rules in 2020, allowing governments to bail out or ease requirements for the airline industry.  

Ryanair argues this provided an unfair advantage to mostly national carriers and will allow them to emerge from the pandemic in a stronger position than peers who did not receive support. 

CEO Michael O'Leary has called rivals such as Lufthansa and Air France "state-aid junkies."  

But not all the court cases have been successful.  

Ryanair has lost five challenges so far, including last month when the General Court backed the Commission's approval of aid for SAS and Finnair, saying the support didn't breach the bloc's state aid rules.  

In February, judges also upheld aid given to Air France and SAS.   

Ryanair said it would appeal some of those decisions.