Malév went bankrupt in 2012.Continue reading
The Court of Justice of the European Union (CJEU) has dismissed Wizz Air’s appeal against the state aid granted to the Romanian airline TAROM, economica.net reports. With this decision, the body upheld the judgment of the European Court of Justice of May 4, 2022, that declared the Hungarian airline’s objections unfounded.
Wizz Air had decided to initiate proceedings before the the Luxembourg-based EU legal body, because in 2020, the Romanian government granted state aid to TAROM in the form of a loan worth EUR 36.66 million. Wizz Air based its appeal on the fact that, given the size of the Romanian air transport market, the possible disappearance of the state-owned airline’s services would not cause significant disruption to the functioning of the market or social problems due to the loss of air connections between certain regions of the country.
The court reaffirms 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,”
according to the reasoning of the judgment.
The CJEU also found Wizz Air’s argument that the state aid would have been unjustified, because competing airlines could have filled the market gap created by the loss of TAROM’s flights to the market to be unfounded.
The Hungarian low-cost airline had also previously taken the privately-owned Romanian low-cost carrier Blue Air to the European Court of Justice over RON 300 million (EUR 60.3 million) state aid to the company, which has since become insolvent and state-owned.
TAROM, 71 years old this year, has been loss-making since 2008, with debts of RON 1.41 billion (EUR 283.5 million) at the end of 2022. The European Commission is currently considering a plan for a further RON 900 million (EUR 181 million) in state aid to help the Bucharest government restructure the company.
Via MTI, economica.net; Featured image: Facebook/TAROM