Ryanair has emerged victorious in its legal challenge against Lufthansa’s €6 billion ($6.6 billion) state bailout granted in 2020, as Europe’s second-highest court found errors in the European Union (EU) competition regulators’ decision to approve the German government’s rescue package.
The ruling could have implications for future state bailouts, even though Lufthansa has already repaid the aid in full.
Lufthansa stated that it would examine the court’s decision and decide on further action accordingly.
The European Commission had previously cleared the German airline’s recapitalization, subject to conditions including a ban on dividends, share buybacks, and certain acquisitions until the state support was repaid.
Several European airlines, including Lufthansa, received state aid due to the COVID-19 pandemic’s prolonged impact on the travel industry.
Ryanair and German peer Condor challenged the EU’s decision on Lufthansa’s bailout.
The Luxembourg-based General Court found that the European Commission made multiple errors, especially in determining that Lufthansa could not secure financing on the markets for all its needs.
The court also found that the EU competition enforcer failed to require a mechanism to incentivize Lufthansa to repurchase Germany’s shareholding as quickly as possible.Â
Furthermore, the court found that the commission had erred in denying Lufthansa’s significant market power at certain airports and accepting various commitments that failed to ensure effective competition preservation in the market.
Ryanair has emerged victorious in its legal challenge against Lufthansa’s €6 billion ($6.6 billion) state bailout granted in 2020, as Europe’s second-highest court found errors in the European Union (EU) competition regulators’ decision to approve the German government’s rescue package.
This ruling marks a significant setback for EU regulators, who have previously lost court cases related to government aid for companies.
In 2020, the General Court rescinded an order for Apple to pay back €14.3bn in taxes to Ireland.Â
The commission has the option to appeal the ruling to the Court of Justice of the European Union, Europe’s highest court.
Ryanair has welcomed the judgment, stating that it confirms the commission’s responsibility to act as a guardian of the level playing field in air transport.
The commission, however, has said that it will “carefully study the judgment and reflect on possible next steps.”
It is unclear whether the commission will appeal against the ruling before the European Court of Justice.
Lufthansa has reported that it has already fully repaid the bailout funds approved by the commission, as well as approximately €92 million in interest.
The German Economic Stabilisation Fund, which arranged the bailout, has sold its shares in Lufthansa for €1 billion.
Lufthansa has stated that the stabilization was already fully terminated before the court ruling.
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