The Hungarian air carrier Wizz Air has lost a legal battle in which it contested an aid package of 36.66m euros granted by Romania’s government to TAROM four years ago.
The European Commission approved billions of euros in state aid for European airlines during the COVID-19 pandemic.
Many of these approvals were subsequently challenged in court by rivals.
Romania provided a loan to finance TAROM’s liquidity needs, which was repayable after six months, points out Romania Insider.
The Court of Justice of the European Union, based in Luxembourg, declared that the EU competition watchdog was correct in approving the aid. “The Court dismisses Wizz Air’s appeal regarding the rescue aid granted by Romania to TAROM. This aid, amounting to EUR 36,660,000, is compatible with European Union law”, stated the judges.
The Court reasoned that “the relatively limited size of the market at issue does not prevent a service provided on that market from being classified as important so that its disruption could give rise to serious social hardship or constitute market failure. This would be the case if TAROM were to cease operations: it would be detrimental to the connectivity of the regions in Romania exclusively served by that airline and to the economic situation of those regions”, according to the official press release.
The European Commission has had a mixed record in defending its decisions in court.
Last month, a lower court rejected the approval it granted in 2020 for EUR 7 billion in state aid to Air France.
