EU judges reject 6 billion aid to Lufthansa (already refunded to state)

The EU General Court has annulled the decision of the European Commission, which approved the recapitalization of Germany’s Lufthansa for 6 billion euros in the context of the Covid-19 outbreak. Two rival airlines, Ryanair and Condor, had objected to the maxi subsidy. According to Luxembourg judges, the European executive “made several mistakes”, notably believing that Lufthansa would not be able to find financing in the markets for all of its needs.

The executive also failed to request a mechanism to encourage Lufthansa to repurchase Germany’s stake as soon as possible, and was wrong to deny the existence of significant market power at certain airports of Lufthansa, and also to accept “non-guaranteed commitments in the market.” maintaining effective competition”.

The consequences of the decision are uncertain. Lufthansa is running an expansion plan that provides for the acquisition of a portion of the shares of Ita Airways, the former Alitalia. Some of the major shareholders of the German company opposed the plan, worried about the stability of accounts, with the takeover of a company that recorded losses of around 500m euros in 2022.

The decision of the EU Court, which can be challenged before the European Court, should normally lead to the return of aid illegally received to the State. In the case of Lufthansa, Spiegel writes that the 6 billion lent was repaid to Berlin with interest.

Source: Today IT

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