Ryanair wins case against Condor as EU court rules against state aid for German airline

Condor ©AirTeamImages

Having challenged financial aid provided to KLM and TAP, Ryanair has successfully challenged the EU’s approval of a €550 million state loan package for struggling German vacation carrier Condor. However, while the top European court’s ruling has annulled the EU’s approval of the loan, it has also suspended the application of the ruling in light of the COVID-19 pandemic.

The Luxembourg-based General Court’s decision was similar to rulings last month in which it annulled EU approval of €3.4 billion in state aid for the Netherlands’ KLM and a potential total of €1.2 billion for Portugal’s TAP. The Court has requested more complete reasoning for the EU’s approval of the aid. 

The loan to Condor to assist it after the collapse of holiday air travel due to COVID-19 came shortly after the parent company of Polish airline LOT pulled out of a takeover bid for the former subsidiary of Thomas Cook, the travel company. This resulted in an extension of insolvency proceedings, from which the restructured company emerged late last year. Last month, Condor announced that investor Attestor Capitol would take a majority stake. The General Court found that it was “incumbent on the Commission to examine with particular care whether the cancellation and rescheduling of Condor flights as a result of the travel restrictions imposed in the context of the pandemic were in fact the decisive cause of the additional costs incurred by Condor as a result of the extension of the insolvency proceedings”. Ryanair had also argued that the proposed €550 million loan constituted an unfair state bailout. (€1.00 = US$1.22 at time of publication.)

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