European Commission approval of a restructuring aid package for German leisure airline Condor in 2021 has been cancelled by the EU’s General Court.
The Commission approved the €321 million package in July 2021. The German government had planned to give this to the airline to support the restructuring and ongoing operations of the airline.
Condor had faced challenges that year following the insolvency of former owner Thomas Cook.
But Ryanair challenged the decision of the Commission before the EU General Court.
The court stated in a ruling on Wednesday that the Commission should have not approved the package without a formal investigation.
Ryanair had demonstrated to a “sufficient degree” that the Commission should have had doubts when giving the go-ahead for the aid.
The Commission should also have questioned if the package satisfied the requirements of existing EU guidelines, such as adequate burden sharing.
The court pointed to a requirement that any restructuring aid that would improve the airline’s equity position should only be granted if the state would also have seen a reasonable share of any future gains in the company’s value.
But it added that Ryanair had not shown that the aid package had caused a “substantial adverse effect” on its competitive position.
The court previously annulled a decision by the Commission to approve aid granted by Germany to Condor during the pandemic. It pointed to an “inadequate statement of reasons” for the decision.
Ryanair challenged this package at the time.
A Ryanair spokesperson hailed the ruling by the court in Luxembourg as “a triumph for fair competition and consumers”.
They said: “One of the EU’s greatest achievements is the creation of a true single market for air transport.
“The European Commission’s approval of the German aid to Condor went against the fundamental principles of EU law.
“Today’s judgment confirms once again that the Commission must act as a guardian of the level playing field in air transport and cannot sign-off discriminatory state aid promoted by national governments.”
Ryanair pointed out that more than €40 billion in state subsidies were handed out to EU flag carriers during the pandemic.
The spokesperson pointed out that the court has ruled that the billions of euros in state aid received by SAS, Lufthansa, Air France-KLM, and certain Italian airlines were unlawful.
“Today’s judgment further underlines the need for the European Commission to immediately act to recover these illegal state aid packages and order remedies to restore at least some of the damage done to competition and consumers,” they added.
Condor operates fleet of more than 50 short-haul and long-haul aircraft.