Croatia Airlines awaits court’s Ryanair ruling
Croatia Airlines is awaiting the EU General Court’s ruling on whether the European Commission’s decision to approve an 11.7-million-euro state injection into the company last year was in line with the block’s rules. The case, brought forward by Ryanair, is likely to be finalised during the third quarter. The budget airline has filed similar complaints over state aid granted to Air France, KLM, TAP Air Portugal and Condor, all of which are related to Covid-19 assistance. The Luxembourg-based General Court has ruled in Ryanair’s favour in the above-mentioned cases but has held off on requesting the airlines to pay back the funds immediately.
Commenting on the matter, Ryanair said, “The EU Commission’s spineless approach to state aid since the beginning of the Covid-19 crisis has allowed member states to write open-ended cheques to their inefficient zombie flag carriers in the name of faded national prestige. The EU commission has hastily approved over thirty billion euros of discriminatory state aid since the crisis began”. Croatia Airlines was compensated with 11.7 million euro for losses incurred as a result of the coronavirus outbreak and the travel restrictions introduced by Croatia and other countries to limit the spread of the virus in the period between March 19, 2020 and June 30, 2020. Ryanair, which will open a base in Zagreb in late August, said last week Croatia Airlines is “irrelevant” in its decisions concerning the Croatian market.
In addition to the 11.7 million euros Croatia Airlines was given to cover losses incurred between March and June 2020, the carrier has also been granted 33.2 million euros as an equity loan by the government and has been recapitalised by the state through a 46.2 million euro cash injection in order to “return the airline’s capital to pre-Covid levels i.e. to the same levels as on December 31, 2019”. Croatia Airlines has said, “This is one of the applicable financial support mechanisms Croatia has adopted based on the European Commission’s temporary framework for state aid measures to support the economy in the current Covid-19 outbreak”. Croatia Airlines registered a 47.3 million euro loss in 2020 after state aid and financial grants are accounted.
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