EU court annuls approval of state aid for Lufthansa

The European Commission should not have approved the German government's decision to provide Lufthansa with billions of euros in state aid during the coronavirus pandemic, the EU General Court ruled on Wednesday.

Strict EU guidelines against government bailouts of companies were loosened during the pandemic and the Commission approved the €6 billion ($6.6 billion) package in June 2020 that saw the German government take a 20% stake in the airline.

The case against the aid was brought by Ryanair and Condor, which called the state support unfair.

In its ruling, the Luxembourg-based court 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."

The Commission also misjudged the German airline's market power at certain airports and agreed to conditions that did not ensure effective competition between airlines, the EU court found.

Lufthansa to analyze ruling

Lufthansa, one of the largest airline groups in Europe and which employs around 110,000 people, said it would analyze the ruling before deciding on further action.

The airline noted that the "stabilization measures" were "already fully terminated before today's court ruling."

This means it has already bought back the German government-owned shares, even though the court noted that there was no mechanism to incentivize this.

It is, therefore, unclear what impact the ruling will have on the airline, which returned to profit last year as air travel picked up again.

The airline can appeal the ruling to the European Court of Justice.

zc, sms/rc (AFP, dpa, AP)