Aviation: EU court rules on lawsuit against aid for Condor

Aviation: EU court rules on lawsuit against aid for Condor

Financial injections from the federal government for the holiday airline Condor have been a concern for the courts for years. Now another verdict is pending. The plaintiff is an old acquaintance.

Was the EU Commission allowed to approve millions in German aid for the holiday airline Condor? The General Court of the European Union will give a ruling on this question in Luxembourg on Wednesday.

Germany wanted to support the airline with so-called restructuring aid in the form of two write-downs of 90 and 20.2 million euros, which were part of the 321.2 million euro restructuring plan launched in October 2019. The EU Commission, which as the highest competition watchdog ensures that companies do not receive unfair advantages through state aid, approved the project in 2021. The Irish airline Ryanair is now defending itself against this in the EU court.

Renovated using the protective shield process

The German state saved Condor in 2019 with a loan from the development bank KfW after the then parent company Thomas Cook went bankrupt. Condor was restructured in protective shield proceedings, and at the beginning of 2020 an investor was available, LOT parent PGL. But immediately after the outbreak of the corona pandemic, the Poles jumped ship – and the German holiday airline needed government help again. Condor then averted the threat of insolvency and left the protective shield procedure on December 1, 2020. A new investor was found in 2021.

It is not the first time that aid for Condor has been an issue in European courts. An earlier decision by the EU Commission on Corona aid from Germany for Condor was initially overturned by a Ryanair lawsuit. The Brussels authorities then approved the Corona aid again in 2021 – and with it the restructuring aid that is now at issue. However, another lawsuit by Ryanair against a 380 million euro rescue loan for Condor after the Cook bankruptcy was dismissed by the EU court.

Lawsuits against state aid are common

The Condor case is one of many in which Ryanair is taking action against state aid for competitors. So far the Irish airline has been successful in some cases but not in others. Condor and Ryanair had successfully sued together last year against the German Corona financial injection for Lufthansa. In this case, a ruling by the European Court of Justice (ECJ) is still pending. In addition, Lufthansa has long since repaid the aid.

If the court overturns the decision on Condor, that does not necessarily mean that the company has to pay back the money immediately. On the one hand, the judgment can still be taken before the highest European court, the ECJ. In addition, the EU Commission could issue a new decision under certain circumstances.

Source: Stern

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