(Finance) – In April 2020, during the Covid-19 pandemic, France has notified the European Commission an individual help measure in favor of Air Francewhich envisaged granting it a State guarantee of 90% on a loan of an amount equal to four billion euros granted by a consortium of banks and a shareholder loan of an amount equal to a maximum of three billion euros. According to the Commission, only Air France was the beneficiary of this aid, to the exclusion of all other companies in the Air France-KLM group.
In March 2021 France also notified the Commission individual aid in the form of recapitalization of Air France and the Air France-KLM holding company, for a total amount of four billion euros. Measure which consisted of France’s participation in a capital increase project of a maximum amount of one billion euros and the conversion of the shareholder loan into a hybrid instrument. According to the Commission, only Air France and the Air France-KLM holding company were beneficiaries of this aid, with the exception in particular of KLM, a company belonging to the Air France-KLM group.
In both cases, the Commission decided not to raise objections: in its opinion, these measures constituted aid compatible with the internal market. Ryanair and Malta Air contested those decisions on the grounds, in essence, that the measures in question were contrary to Union law. In their opinion, the Commission erroneously defined the beneficiaries of this aid, declaring that neither the Air France-KLM holding company (in the contested decision in case T-216/21) nor KLM (in the two contested decisions) were beneficiaries of such aid.
The Court accepted the appeals, after examining the patrimonial, organic, functional and economic links between the companies of the Air France-KLM group, the contractual framework on the basis of which the measures in question were granted as well as the type of aid measure respectively granted and the context in which which the latter were inserted. It concludes, on that basis, that there was a possibility that the Air France-KLM holding company (in the first case) and KLM (in the second case) benefited, at least indirectly, from the advantage granted by the State aid in question.
(Photo: Court of Justice of the European Union)