CJEU annuls Volotea and easyJet state aid cases
International Tax Review is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

CJEU annuls Volotea and easyJet state aid cases

Nose to nose with a beautiful private business Gulfstream G-V je

The CJEU said the General Court erred in law when it ruled that both companies benefitted from Italian state aid.

The Court of Justice of the EU decided on Friday, November 17, to set aside and annul a General Court judgment concerning airline companies Volotea and easyJet in joined cases C-331/20 P and C-343/20 P.

It followed a European Commission investigation into an Italian regional law after airports in Sardinia were granted state financing for the development of air routes on the island.

In a decision in July 2016, the Commission ruled that the measures were unlawful and that Volotea and easyJet benefited from state aid that was deemed incompatible with the internal market in connection to activities in Cagliari-Elmas and Olbia airports.

Both airlines demanded the actions be annulled.

In May 2020, the General Court dismissed the actions before Volotea and easyJet appealed to the CJEU for the judgment to be set aside.

Under Article 107 of the Treaty on the Functioning of the EU (TFEU), a state measure can be considered state aid if it offers an advantage to the recipient over its competitors. The TFEU prohibits state aid unless justified by reasons of economic development.

The CJEU ruled that the General Court’s judgment did not prove that the Commission determined whether contracts for the services made between the airports and the airlines followed market conditions.

By stating that Volotea and easyJet had benefited from an advantage under the contracts with the airports, the General Court also erred in law as the services provided did not meet the needs of Sardinia, the CJEU found.

The General Court also ruled there was no tender procedure before the contracts were concluded, said the CJEU in its ruling.

According to the CJEU, the General Court failed to apply the “market economy operator principle” in the case.

The court therefore set aside and annulled the decision concerning Volotea and easyJet. The aid granted to both airlines was ruled legitimate.

Other EU state aid cases, including the CJEU ruling against the Fiat-Chrysler group this month, show that companies and jurisdictions are under increasing scrutiny.

In its November 8 decision, the court said the Commission and General Court had incorrectly ruled that Luxembourg breached state aid rules in approving an advance transfer pricing agreement for Fiat Chrysler Finance Europe, formerly known as Fiat Finance and Trade.

more across site & bottom lb ros

More from across our site

UK tax credit consultancy ForrestBrown also warned that advisors must get up to speed in order to support their clients
Large firms like EY risk losing staff for good if they track attendance, a prominent former management consultant for the firm has warned
Research has claimed that the net US federal income tax bills of 35 companies were negative $1.72 billion, while, in other news, Italy’s economy minister has predicted that pillar two will fail
Janet Truncale has handed two out of four global managing partner roles to defeated leadership rivals
A survey of more than 25,000 in-house lawyers reveals that embracing technology could help law firms win new business
The appeal related to deductions claimed by the Singaporean telecoms company, which was advised by PwC, on a A$5.2 billion acquisition from 2002
The latest wave of cuts follows chastening revelations regarding the ‘big four’ firm’s tax leaks scandal
UN proposals to reform the taxation of the aviation industry would lead to substantial economic cost for developing countries, argues Willie Walsh, director general of the International Air Transport Association
An anonymous litigation financier whose identity UK law firm Mishcon de Reya is said to know is allegedly covertly attacking tax transparency regulation
Silvana Van der Velde adds that thus far she has come across pillar two when it comes to joint venture agreements
Gift this article