EU General Court Upholds Commission’s Decision to Grant Over €36 Million to Romanian Airline TAROM
The request had been filed by airline Wizz Air Hungary Zrt, which told the Court that the EU Commission had granted approximately €36,660,000 to Romania to finance TAROM’s liquidity, a Romanian airline which is active in the domestic and international transport of passengers, without initiating the formal investigation procedure, which is the norm.
“The General Court rejects, in the first place, the pleas in law for annulment alleging that the Commission erred in law by deciding not to initiate the formal investigation procedure despite the doubts that it should have harboured during the preliminary assessment as to whether the notified aid was compatible with the internal market,” the Court notes in its decision.
Explaining the decision, the Court notes that since taking into account the poor condition of Romanian road and rail infrastructure, the domestic air routes and international connectivity provided by TAROM were an important service, the disruption of which could cause serious social hardship or constitute a market failure.
“In that context, the General Court clarifies that, when the existence and legality of State aid are being examined, it may be necessary for the Commission, where appropriate, to go beyond a mere examination of the facts and points of law brought to its notice,” the Court rules, thus rejecting Wizz Air Hungary’s plea in law alleging infringement of the Commission’s obligation to state reasons, consequently dismissing the action in its entirety.
Wizz Air Hungary can now file an appeal with the Court of Justice against this decision of the General Court within the next two months, starting from May 14.
The EU Commission has approved Romania’s plans to grant a temporary loan of approximately €36.7 million to TAROM in a bid to ensure the orderly continuation of air transport services in the country and avoid disruptions for passengers.
At the time, the Commission had asserted that the loan would fully cover TAROM’s demonstrated liquidity needs for a period of six months. After this period, Romania authorities would ensure that the loan would be fully repaid.
Under the Coronavirus state aid, Romania had also benefited. At the beginning of last month, most recently, the Commission allocated a €1 million fund for Romanian airlines affected by COVID-19 operating mainly at the Arad airport.
