Court annuls EU approval of German billions for Lufthansa

BRUSSELS (AP): A top European Union court on Wednesday ruled the EU was wrong to approve a plan for Germany to come to the rescue of Lufthansa with billions of euros in state aid to help the airline deal with the impact of COVID-19 restrictions.

In June 2020, Germany notified the EU’s executive branch, the European Commission, of its intention to provide 6 billion euros ($6.6 billion) in aid to Lufthansa. The 27 EU member countries must seek commission approval when supplying financial support to companies.

The EU’s General Court ruled that the commission “committed several errors” in making its positive assessment of the move, following an appeal to the Luxembourg-based tribunal by low-cost carrier Ryanair.

It was not immediately clear what impact the ruling might have on Germany, or on other state aid that was approved at the time with the aim of helping to keep Europe’s airlines afloat during the pandemic.

Among the errors, a statement from the court said, was to consider “that Lufthansa was unable to obtain financing on the markets for the entirety of its needs,” and “by failing to require a mechanism incentivizing Lufthansa to buy back Germany’s shareholding as quickly as possible.”

It also said that the commission acted incorrectly “by denying that Lufthansa held significant market power at certain airports, and by accepting various commitments that do not ensure that effective competition on the market is preserved.”

The commission is the EU’s anti-trust watchdog. As pandemic restrictions in 2020 brought travel to a halt and threatened the very existence of airlines, it eased its policies, approving billions of euros in support for national flag-carriers.