During the Corona period, the EU Commission approved around six billion euros in support for Lufthansa. The airline has paid the money back. Nevertheless, the payment is now being investigated again.
The EU Commission is launching an investigation into the billions in state aid granted to Lufthansa during the Corona pandemic. The aim is to clarify whether the aid was in line with European state aid rules.
The background to the investigation is a ruling by the EU General Court from just over a year ago. The judges in Luxembourg had decided that the EU Commission should not have approved the aid amounting to around six billion euros. The EU Commission had made several errors in its assessment, and the EU General Court had therefore declared the Commission’s approval void.
Competition authorities should have examined more closely whether Lufthansa still had its own collateral to obtain loans. The court also criticized the fact that Lufthansa’s market power at the airports was underestimated.
EU Commission examines aid for Lufthansa
The Commission is now reviewing its decision again and will take into account Lufthansa’s market power at the airports in Vienna and Düsseldorf. However, the authority stresses that the initiation of an investigation does not say anything about its outcome.
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The travel restrictions during the pandemic had brought Lufthansa’s business to a virtual standstill. Tens of thousands of jobs were at risk in the group, which employs around 138,000 people. That is why the German government supported Germany’s largest airline in spring 2020.
State aid fully repaid
Germany, Austria, Switzerland and Belgium had promised the Lufthansa Group a total of nine billion euros in aid, but this was not fully drawn down. The lion’s share of the sum came from Germany, Lufthansa’s home country. Six billion euros, including a 20 percent share package and silent partnerships, went to the federal government’s Economic Stabilization Fund (WSF), while the state-owned KfW Bank contributed a loan of one billion euros. The European partners only joined the aid pact at a later date.
The rescued company had repaid the aid in full by the end of 2022 and partly replaced it with its own debts. Lufthansa CEO Carsten Spohr explained that it would rather be in debt to the market than to the taxpayer. The bottom line is that the German state did not lose any money, but actually made a profit of around 760 million euros from interest and share sales.
Source: Stern
