Lufthansa is recording high losses in the pandemic. The federal government is stepping in with a rescue package worth billions. The EU Commission approves the aid – wrongly, it is now said.
According to the EU court, the EU Commission was not allowed to approve the billions in aid from the federal government for Lufthansa during the pandemic. This was announced by the judges in Luxembourg on Wednesday. The judgment can be appealed to the highest European court, the European Court of Justice.
The travel restrictions in the pandemic had almost brought Lufthansa’s business to a standstill. In the group with around 138,000 employees, tens of thousands of jobs were on the brink. That is why the federal government supported the largest German airline in spring 2020 with an aid package worth billions. In return, Lufthansa had to undertake to avoid distortions of competition, such as handing over take-off and landing rights in Frankfurt and Munich to the competition.
The rescue plan called for the State Economic Stabilization Fund to subscribe to shares in a capital increase to build a 20 percent stake in the airline’s share capital. In addition, silent participations of up to 5.7 billion euros and a loan of up to three billion euros were planned. However, the latter was not subject to the conditions and had in principle already been approved beforehand.
The EU Commission approved the aid of six billion euros in June 2020. Lufthansa competitors Ryanair and Condor defended themselves against this decision by the EU Commission before the EU court.
The judges partially agreed with them. The EU Commission made several mistakes in its assessment. On the one hand, she wrongly assumed that Lufthansa could not obtain the necessary funds on the markets. In addition, they misjudged Lufthansa’s considerable market power at certain airports. The obligations imposed on the company have therefore not ensured that effective competition is maintained.
Decision of the EU Commission from 2020 Ryanair’s lawsuit Condor’s lawsuit
Source: Stern
