General Court dismisses Ryanair appeal against Italian COVID aid scheme

The General Court of the European Union ruled on 8 July 2026 to dismiss Ryanair DAC’s legal challenge against the European Commission’s decision to approve an Italian state aid scheme for airlines during the pandemic. The judgment, published in the Official Journal of the European Union on 17 August 2026, confirms that the compensation scheme did not violate EU competition rules.

The case concerned Commission Decision C(2020) 9625 final of 22 December 2020, which cleared the Italian compensation scheme under State aid SA.59029 (2020/N). The scheme was designed to compensate airlines with an Italian operating licence for damage caused by the COVID-19 pandemic, an exceptional occurrence under Article 107(2)(b) TFEU. Ryanair DAC, an Irish airline, challenged the decision, arguing it was discriminatory and infringed the freedom of establishment.

The Italian compensation scheme and legal challenge

The Italian scheme provided financial compensation to airlines with an Italian operating licence to make good the damage caused by the pandemic. The aid was subject to eligibility conditions, including a minimum remuneration requirement for employees whose home base is located in Italy. Ryanair contended that these conditions were discriminatory and breached the principles of free provision of services and freedom of establishment.

Ryanair DAC (based in Swords, Ireland) was represented by lawyers F.-C. Laprévote, E. Vahida, S. Rating, C. Cozzani, and T. Capelli. The European Commission was represented by agents L. Flynn, J. Carpi Badía, and F. Tomat. Three Italian airlines intervened in support of the Commission:

• Neos SpA (Somma Lombardo, Italy)
• Blue Panorama Airlines SpA (Somma Lombardo, Italy)
• Air Dolomiti SpA – Linee Aeree Regionali Europee (Villafranca di Verona, Italy)

Court’s reasoning and dismissal

The Court examined Ryanair’s arguments regarding the obligation to state reasons, the principle of non-discrimination, and the assessment of damage and causal link under Article 8 of Regulation (EC) No 593/2008. The judges concluded that the Commission’s decision was lawful and that the Italian scheme did not unjustifiably disadvantage airlines operating across borders within the EU.

In its operative part, the Court:

1. Dismissed the action brought by Ryanair DAC.
2. Ordered Ryanair DAC to bear its own costs and to pay those incurred by the European Commission, Neos SpA, and Air Dolomiti SpA in the referral procedure (Case T 268/21 RENV), the appeal proceedings before the Court of Justice (Case C 490/23 P), and the initial proceedings before the General Court (Case T 268/21). Ryanair was also ordered to pay the costs of Blue Panorama Airlines SpA from the initial proceedings.

Impact and significance for EU aviation

This ruling reinforces the European Commission’s discretion to approve state aid measures that address exceptional circumstances like the COVID-19 pandemic, provided they meet the conditions of Article 107(2)(b) TFEU. For airlines operating in the EU, the decision underscores the limits of legal challenges against national compensation schemes that are designed to mitigate pandemic-related damage.

The judgment is a setback for Ryanair, which has frequently challenged state aid to competitors across Europe. It sets a precedent for how courts evaluate claims of discrimination and freedom of establishment in the context of crisis-related aid. The case reference is Case T-268/21 RENV, published as CELEX:C_202604294 in the Official Journal of the European Union, C series, number C/2026/4294, dated 17 August 2026, page 1.

Source: Official Journal of the European Union, C/2026/4294, 17 August 2026, C series, p. 1 (official reference: CELEX:C_202604294).