Neutrality and Equality Aspects in the EU State Aid Temporary Framework 2020: The Case of the Airline Industry

Abstract

Following the declaration of the COVID-19 pandemic, the restrictions imposed by the Member States (MSs) of the European Union (EU) led the tourism and commercial air transport industry to face serious financial difficulties that required airlines to apply for state support. In March 2020, the European Commission adopted a State Aid Temporary Framework (TF) for the COVID-19 period to simplify the process of granting aid, allowing the MSs rapid economic interventions. Claims regarding the approval of State aid to certain airlines reached the EU General Court (EGC), on the grounds of violation of the fair competition principle. It became clear that the processes enabled by the TF dispensed unequal treatment to airline companies and that the flexibility of the TF created competition imbalances. In spite of these events, little attention has been given to the way its application ignores the requirements of EU State aid control and other procedural justice and fairness principles, by failing to ensure neutrality and equality. This article addresses the matter using a standard legal interpretive approach to explain the imbalances created by the regulation. It presents a systematic review of the current regime, identifies the TF inefficiencies affecting competition principles, and argues for specific adjustments that could enhance its transparency. These contributions are useful to improve the existing framework and help prepare for a better management of future crises.

Keywords

• airline industry
• covid-19
• european union
• fair competition principle
• procedural justice
• state aid temporary framework
• transparency