Wizz Air Loses Challenge to TAROM’s State Aid in European Court

Wizz Air’s challenge against a capital increase for its Romanian competitor TAROM was rejected by the General Court of the European Union. The decision upheld the European Commission’s approval of state aid provided by Romania to support TAROM during the COVID-19 pandemic, as reported by Reuters.

Wizz Air had taken the case to the Luxembourg-based court after the European Commission sanctioned a €2 million ($2.15 million) financial aid package for TAROM, aiming to mitigate the financial consequences of travel restrictions imposed during the pandemic. The European Commission had previously determined that the assistance complied with EU state aid regulations, choosing not to launch a formal investigation into the matter.

The General Court ruled that the aid granted to TAROM was “compatible with the internal market,” agreeing with the Commission’s assessment that the financial support was proportionate to the challenges faced by the airline. In its ruling, the court affirmed that the Commission had appropriately evaluated the impact of the aid package on competition within the European airline industry.

Wizz Air, however, still has the option to escalate the matter to the Court of Justice of the European Union, which could examine the case on legal grounds. The ruling highlights ongoing tensions within the airline industry, as several European carriers, including Wizz Air and Ryanair, have filed lawsuits in response to the large-scale state aid packages provided to airlines during the pandemic.