German airline Condor faced challenges following the insolvency of former owner Thomas Cook. Photo: Getty
The European Union’s General Court has cancelled the decision made by the European Commission to approve a restructuring aid package for German airline Condor in 2021.
The Commission approved the €321m package in July 2021. The German government had planned to give this to the airline to support the restructuring and ongoing operations of the airline.
Condor had faced challenges that year following the insolvency of former owner Thomas Cook.
Ryanair had challenged the decision of the Commission before the EU General Court.
The General Court stated in its ruling on Wednesday that the Commission should have not approved the package without a formal investigation. It added that Ryanair had demonstrated to a “sufficient degree” that the Commission should have had doubts when giving the go-ahead for the aid.
It reported that the Commission should have questioned if the package satisfied the requirements of existing EU guidelines, such as adequate burden sharing.
The court pointed to the requirement that any restructuring aid that would improve the airline’s equity position should only be granted if the State would also have seen a reasonable share of any future gains in the company’s value.
It added that Ryanair had not demonstrated that the aid package had caused a “substantial adverse effect” on its competitive position.
The General Court previously annulled the decision of the Commission to approve aid granted by Germany to Condor during the pandemic. It pointed to an “inadequate statement of reasons” for the decision.
Ryanair challenged this package at the time.
A Ryanair spokesperson described the ruling as “a triumph for fair competition and consumers”.
“The European Commission’s approval of the German aid to Condor went against the fundamental principles of EU law,” they said.
“Today’s judgment confirms once again that the Commission must act as a guardian of the level playing field in air transport and cannot sign-off discriminatory State aid promoted by national governments.”
They added that the General Court has already ruled that State aid received by other airlines, including Lufthansa, SAS and Air France-KLM, were unlawful.
“Today’s judgment further underlines the need for the European Commission to immediately act to recover these illegal state-aid packages and order remedies to restore at least some of the damage done to competition and consumers,” the spokesperson concluded.
