European court rules against Lufthansa’s Covid state bailout
Photo: Unsplash
A European court has annulled the decision by the European Commission to approve a €6 billion state bailout for Lufthansa during the Covid-19 pandemic.
Fellow airlines Ryanair and Condor launched legal action against the commission for approving the German government’s rescue package for Lufthansa in 2020.
The EU General Court ruled against the European Commission in a judgement published on Wednesday (10 May) after finding that the commission had made “several errors” in approving Lufthansa’s state aid package.
These errors included the commission considering that Lufthansa was “unable to obtain financing on the markets for the entirety of its needs”, as well as “failing to require a mechanism incentivising Lufthansa to buy back Germany’s shareholding as quickly as possible”.
The court also said the commission had denied that Lufthansa “held significant market power at certain airports”, and had erred further by “accepting certain commitments that do not ensure that effective competition on the market is preserved”.
Lufthansa said in a statement that it would “analyse the ruling and then decide on further action”. The airline added that it had already paid back the financial “stabilisation measures”, which were approved by the European Commission.
The carrier completed the repayment of the financial aid from the German state in November 2021. The German government has also sold its shareholding in Lufthansa, which was initially acquired as part of the Covid bailout.
Ryanair, which has launched a string of legal actions against state aid to European airlines, said in a statement: “Today’s judgement confirms that the commission must act as a guardian of the level playing field in air transport and cannot sign off discriminatory state aid under political pressure by national governments. The court’s intervention is a triumph for fair competition and consumers across the EU.”
The decision by the General Court against the European Commission can be appealed to the EU’s highest court, the European Court of Justice.
source: BTN Europe
