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BRUSSELS (Reuters) – Irish airline Ryanair on Wednesday won its challenge against Lufthansa’s state bailout in 2020 triggered by the coronavirus pandemic as Europe’s second-top court cited errors in EU competition regulators’ decision to approve the state aid.
The European Commission had cleared Lufthansa’s 6 billion euro ($6.6 billion) recapitalisation subject to a ban on dividends, share buybacks and some acquisitions until the state support was paid back.
Lufthansa and numerous EU airlines received state aid following a protracted travel slump due to the coronavirus pandemic, all of which were approved by the EU executive subject to strict conditions.
Ryanair and German peer Condor subsequently challenged the EU decision on Lufthansa.
“The General Court annuls the decision of the Commission to approve the recapitalisation of Lufthansa by Germany, amounting to 6 billion euros, in the context of the COVID-19 pandemic,” the Luxembourg-based tribunal said.
Judges said the Commission “committed several errors, in particular, by considering that Lufthansa was unable to obtain financing on the markets for the entirety of its needs”.
They said the EU competition enforcer also failed to require a mechanism incentivising Lufthansa to buy back Germany’s shareholding as quickly as possible and erred by denying that Lufthansa held significant market power at certain airports.
Lastly the Court said the Commission also erred “by accepting various commitments that do not ensure that effective competition on the market is preserved”.
The Commission can appeal to the Court of the Justice of the European Union, Europe’s top, on points of law.
The joined cases are T-34/21 Ryanair v Commission (Lufthansa; Covid-19) & T-87/21 Condor Flugdienst v Commission (Lufthansa; Covid-19).
($1 = 0.9084 euros)
