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Aer Arann ordered to repay illegal state aid.

  • 21-11-2019 11:09pm
    Registered Users Posts: 1,035 ✭✭✭

    this falls to stobart to pay.
    The High Court has refused a request by Aer Arann to put a stay on a requirement the airline repay €2.9m in illegal state aid arising out of the now-defunct air travel tax.

    The written ruling on the court's website follows an application by the Department of Justice to have judgment granted in its favour to recover sums owed by Aer Arann.

    The airline sought the stay on the basis that it intends to appeal an element of a ruling made by Mr Justice Max Barrett in July. It relates to legal proceedings arising out of a European Commission finding that the air travel tax, which operated in the Republic between 2009 and 2011, constituted illegal state aid.

    Aer Arann believes it should not have to repay the portion of the tax relating to the period before the company entered into examinership in 2010, as examinership operates to wipe out all previous debts, including state aid.

    However, Mr Justice Barrett said the stay would effectively mean the decision of the European Commission was not being applied to Aer Arann, and would underplay the seriousness of what the commission had identified as a distortion of competition, which the State was required to rectify.

    The judge said Aer Arann had not demonstrated that a refusal of the stay would imperil its financial viability.

    In pleadings, the airline acknowledged that a failure to obtain a stay would not put it out of business, but would impose a significant cash disadvantage on it and its parent company, the Stobart Group.

    The judge noted there was also a risk that the European Commission would commence infringement proceedings against the State if the stay was granted.

    The case has its background in a complaint by Ryanair to Brussels that Aer Arran was particularly benefiting from a lower rate of the air travel tax.

    The European Commission subsequently ruled that the air travel tax was selective, with the lower tax rate providing an advantage to airlines operating shorter routes.