The government guarantee helped Finnair borrow €600m from a pension fund to help it survive during the crisis.
In May 2020, the European Commission deemed the support to be state aid and approved it under emergency measures introduced to allow EU member states to support their economies during the pandemic.
The Finnish government guaranteed 90pc of the €600m secured by Finnair. The remaining 10pc was covered by a commercial bank under normal market conditions. The guarantee was intended to be triggered only in the event of Finnair’s default with regard to the money secured from the pension fund.
In June 2020, Ryanair brought an action seeking to have the European Commission decision annulled. It opposed the decision on a number of grounds.
The General Court rejected three of four of the grounds, and noted that the third alleged infringement did not merit consideration given the other grounds had been rejected.
Ryanair, whose group chief executive is Michael O’Leary, appealed that ruling. It alleged that the General Court had erred in law and that there was a “manifest distortion” of the facts because the court rejected its plea alleging a specific infringement of a relevant EU article. It also put forward a number of other grounds of appeal.
But the Court of Justice has rejected its appeal in its entirety. Ryanair has been ordered to pay its own costs and those of the European Commission.
Ryanair has taken dozens of cases in Europe in relation to state aid that was given to airlines across the trading bloc as they faced collapse during the pandemic.
It has won some cases taken in relation to aid granted to carriers including Portugal’s TAP and Air-France-KLM in The Netherlands. Earlier this year, it won a case against €321m in aid that had been given to Germany’s Condor.
Last year, it also succeeded in the European Court of Justice in reversing €6bn in aid that was given to Lufthansa by the German government during the Covid crisis.
But Ryanair has lost cases involving aid to airlines including Lufthansa’s Austrian Airlines and Sweden’s SAS.
Ryanair has claimed that more than €40bn of “discriminatory” state subsidies were given to EU flag carriers during the pandemic.
“Undistorted competition eliminates inefficiency and benefits consumers through low fares and choice,” it insisted earlier this year. “Unjustified subsidies, on the other hand, encourage ineffectiveness and will harm consumers for decades to come.”
In September 2020, Ryanair raised €400m from investors via a share-placing as it navigated the Covid crisis. It intended to use the money to strengthen its balance sheet to take advantage of opportunities it expected to arise as the pandemic eventually waned.
In May the following year, it raised €1.2bn in bonds at a record low rate, with the money earmarked to repay existing debt and for general corporate purposes.
