had no right to agree to the multi-billion dollar support of the German government for the pandemic, the Court of the European Union (1st instance) ruled on Wednesday. This ruling may be appealed to the Commission by .
Germany gave the money to Lufthansa
Travel restrictions during the pandemic have brought Lufthansa to a virtual standstill. In a company employing almost 140,000 tens of thousands of jobs were at risk. Therefore, in the spring of 2020, the German government supported the largest German airline with an aid package worth several billion euros. In return, Lufthansa had to undertake not to exploit its competitive advantage and transfer to competitors some of its take-off and landing rights (so-called slots) at Frankfurt am Main and Munich airports.
The rescue plan provided that the state-owned Economic Stabilization Fund, as part of the capital increase, was to obtain a 20% stake in the carrier’s share capital for EUR 5.7 billion and to grant Lufthansa a EUR 3 billion loan from a state-owned bank. However, this loan was not included directly in the aid package and had already been approved earlier.
Lufthansa got help from the German government. EU Court: The European Commission made several mistakes
The European Commission approved €6 billion in aid in June 2020. Lufthansa’s competitors, Ryanair and Condor, have appealed to the EU General Court against this Commission decision. Now the judges have partly agreed with them. According to the court, the Commission made several errors in its assessment of the situation. On the one hand, it incorrectly assumed that Lufthansa would not be able to raise the necessary funds in the markets. In addition, it misjudged Lufthansa’s considerable market power at certain airports. The obligations imposed on the German carrier did not ensure the maintenance of competition on the market. In response to the court’s ruling, Lufthansa indicated that the aid had already been repaid and full stabilization of the company had been achieved. Lufthansa announced that it would thoroughly analyze the court’s decision and take further steps, if any.
(DPA/hre)
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Source: Gazeta
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