Wednesday, March 31, 2010

Illegal Aid for Air France?

Irish low-cost carrier Ryanair filed suit against the French Government earlier this month on the grounds it provided illegal State aid to Air France-KLM.  See Heather Smith, Ryanair Sues French Government Over Air France Aid, Irish Independent, Mar. 31, 2010 (available here).  Air France filed a seperate complaint before the European Commission, alleging that Ryanair receives illegal aid from French regional airports.  See Peppi Kivinemi, Air France Files Complaint at EU Against Ryanair, Dow Jones Newswires, Mar. 11, 2010 (available here).

Neither carrier is a stranger to State aid charges.  Since 2004, Ryanair has been in frequent contention with the Commission concerning special tax breaks, landing fee reductions, and other compensation the airline receives in exchange for providing scheduled service to regional airports across the EU.  See earlier blog posts on Ryanair here, here, and here.  In 1991 and 1994, the French Government injected billions of dollars in aid into its compagnie nationale.  While the transactions received scrutiny from the Commission, both were ultimately cleared.  See Andrew Marshall et al., EC Caves In Over Air France State Aid, Independent (London), July 28, 1994 (available here).

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