Brussels (Brussels Morning) – The EU General Court overturns the Commission’s approval of Condor’s aid package, siding with Ryanair’s objections. Though not fully vindicated, Ryanair lauds the ruling as crucial for fair competition.
The European Union’s General Court nullified a previous decision made by the European Commission (EC) to support a restructuring aid package for German leisure airline Condor in 2021. The EC agreed to the €321 million ($344.4 million) funding package in July 2021, permitting the German government to provide financial assistance to the airline to support the restructuring and continued operations of the airline during and pursuing the COVID-19 pandemic, thereby throwing the carrier a financial lifeline.
Was Ryanair Successful in Challenging EU Commission’s Decision?
The case was carried by the Irish low-cost carrier Ryanair which had questioned the decision of the Commission before the EU General Court. Ryanair has historically maintained a publicly vociferous stance in its complaints about state aid being provided to keep European competitors flying, which it says goes against free market competition rules. Condor encountered financial challenges throughout 2021 following the bankruptcy of its former owner, the German-based Thomas Cook travel group.
Did the EU Commission Act Unlawfully in Supporting Condor?
On May 8, 2024, the General Court said in its ruling that the Commission should not have supported the rescue package without carrying out a formal investigation. It counted that Ryanair had presented to a “sufficient degree” that the Commission should have had suspicions when giving the go-ahead for the state aid. The court should have also examined whether the package satisfied the conditions of existing EU guidelines, such as adequate burden sharing.
In its ruling, the court emphasised the specific requirement that any restructuring support that would improve the airline’s equity situation should only be granted if the state would also have noticed a reasonable share of any future gains in the company’s value.
Did the EU Court Find Fault with Commission’s Decision?
Furthermore, the court said that any state should intervene by delivering financial aid only after losses have been attributed to existing shareholders and deficit holders, while a State should also gain “a reasonable share of future gains”. The court decided that there was no evidence suggesting that the EC peeked into whether the aid would provide Germany with a reasonable share of future gains in the value of Condor.
Despite the state assistance decision being annulled, Ryanair did not quite receive complete satisfaction of its complaint being upheld. The court stated that while Ryanair was permitted to annul the EC’s decision, the Irish low-cost carrier could not question the contents of the conclusion since the carrier had not adequately demonstrated that the aid provided to Condor had led to “a substantial adverse effect on its competitive position”.
Did Ryanair’s Objections Impact EU Commission’s Action?
Ryanair spokesperson characterised the ruling as “a triumph for fair competition and consumers”.
“The European Commission’s authorisation of the German aid to Condor went against the fundamental principles of EU law,” stated a Ryanair statement. “Today’s judgment confirms once again that the Commission must serve as a guardian of the level playing field in air transport and cannot sign off discriminatory State aid promoted by national governments.”
Ryanair also emphasised the fact that the General Court has already headed that state aid received by other airlines in 2020 and 2021, including Lufthansa, SAS, and Air France-KLM, was illegal – all cases in response to formal complaints lodged by Ryanair itself.
