EU top court tells tribunal to reassess veto on €3.4 billion aid to KLM

By Foo Yun Chee and Sudip Kar-Gupta

BRUSSELS, Nov 5 (Reuters) - Europe's top court on Thursday ordered a tribunal to reassess its decision to block €3.4 billion ($3.8 billion) in Dutch state aid to Air France-KLM's pandemic-hit Dutch unit in 2020.

The General Court had in 2021 and 2024 backed challenges against the aid from rival Ryanair, prompting the European Commission to appeal to the Luxembourg-based Court of Justice of the European Union (CJEU).

Thursday's ruling is a setback for Ryanair, which launched more than a dozen challenges against its rivals after EU governments pumped billions of euros into their flag carriers amidst the COVID-19 pandemic in 2020.

"The Court sets aside the General Court's judgment by which the Commission's approval of €3.4 billion in State aid granted by the Netherlands to KLM had been annulled," the CJEU said.

Judges dismissed Ryanair's lawsuit in part and told the General Court to examine several legal aspects which it had not examined previously.

They also criticised the tribunal for legal errors in its judgment.

In another separate case, the CJEU threw out Ryanair's appeal against €321 million in German aid granted in 2021 to COVID-hit German charter airline Condor, overturning the lower tribunal's backing for the Irish airline's challenge.

The cases are C-266/24 P Commission v Ryanair (Covid 19 State Aid KLM), C-269/24 P Koninklijke Luchtvaart Maatschappij v Ryanair (Covid 19 State Aid KLM), C-289/24 P Société Air France et Air France-KLM v Ryanair (Covid 19 State Aid KLM), and C-505/24 P Condor Flugdienst v Ryanair.

($1 = 0.8880 euros)

(Reporting by Foo Yun Chee;Editing by Sudip Kar-Gupta and Philippa Fletcher)