A legal challenge by Ryanair against the European Commission’s approval of Covid-19 aid granted by Germany to charter airline Condor has been dismissed by the Court of Justice of the European Union.
Two loans were granted by German bank Kreditanstalt für Wiederaufbau and accompanied by a State guarantee in 2020 after the pandemic restrictions grounded air travel. The move was later approved by the European Commission.
The loans consisted of a total nominal amount of €400 million, while the aid element amounted to €144.1 million. At the time of the first decision, the two loans amounted to a total of €550 million while the aid element was €267.1 million.
Condor was part of the Thomas Cook Group, which collapsed in 2019, forcing the airline to file for insolvency. Those proceedings were extended to April 2020 when an investor lined up to rescue the airline pulled out of the deal.
Ryanair’s action argued the commission failed to take into account the damage caused to Condor’s business by its own insolvency when it ruled that the aid from the German state did not breach EU law.
Following that action, the General Court of the European Union annulled the commission’s decision to allow the aid the following year, but suspended its ruling pending a further decision by officials.
On Wednesday, the court dismissed the action, and said the fact that Condor is in difficulty and has received rescue and restructuring aid “does not prevent it from also receiving aid in the context of the Covid-19 pandemic”.
The court rejected Ryanair’s evidence contesting the commission’s view that Germany’s aid to the airline was compatible with EU law as it was meant to compensate Condor for damage caused by natural disasters and exceptional circumstances.
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“Ryanair has not demonstrated that the commission should have had doubts as to the direct causal link between the travel restrictions linked to the Covid-19 pandemic and the damage suffered by Condor,” it said.
The court said Condor was a “sound and viable” undertaking whose difficulties were linked to those of its parent company. “The commission could therefore expect the investors to express an interest in its purchase,” it said.
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It also rejected Ryanair’s argument that the European Commission failed to ensure the aid at issue compensated only the costs generated by the travel restrictions linked to the pandemic and not the costs associated with Condor’s pre-existing difficulties.
Similarly, Ryanair’s arguments alleging the commission failed to take into consideration a potential risk of double compensation as a result of the rescue aid from which Condor previously benefited were rejected.
Ryanair also failed to demonstrate that the aid at issue is discriminatory in relation to other airlines operating in Germany, in particular Ryanair itself.
The Condor ruling is the latest in a series of challenges Ryanair has taken over pandemic-related state aid for airlines across Europe.
The Irish airline has previously won challenges against state support given to Lufthansa, Air France KLM, Portugal’s TAP and some Italian airlines but has lost similar actions against SAS, Finnair, Austrian Airlines/Laudamotion and now Condor.
