Ryanair has hailed a European Union General Court ruling which annulled a decision to allow a €6 billion bailout for German flag carrier Lufthansa during the pandemic.
The budget carrier said the “blockbuster” German state aid package in 2020 was discriminatory as it favoured Lufthansa over other European Union airlines.
The Luxembourg-based General Court said on Wednesday (May 10): “The Commission committed several errors, in particular, by considering that Lufthansa was unable to obtain financing on the markets for the entirety of its needs, by failing to require a mechanism incentivising Lufthansa to buy back Germany’s shareholding as quickly as possible, by denying that Lufthansa held significant market power at certain airports, and by accepting various commitments that do not ensure that effective competition on the market is preserved.”
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Ryanair also welcomed the court’s ruling on state aid for SAS, after the Swedish and Danish governments recapitalised the Scandinavian carrier with aid worth €1 billion.
A Ryanair spokesperson said: “The European Commission’s approval of the German recapitalisation aid to Lufthansa and the Swedish and Danish recapitalisation aid to SAS went against the fundamental principles of EU law.
“Today’s judgments confirm that the Commission must act as a guardian of the level playing field in air transport and cannot sign off discriminatory state aid under political pressure by national governments.
“The Court’s intervention is a triumph for fair competition and consumers across the EU.
“During the Covid-19 pandemic over €40 billion in discriminatory state subsidies has been gifted to EU flag carriers.
“Unless halted by the EU Courts in line with today’s ruling, this state aid spree will distort the market for decades to come.”
The Irish Times noted that Lufthansa has already repaid the aid in full, which could limit any immediate impact of the ruling, although it could have consequences for future state bailouts.
Lufthansa said in a statement that it will “analyze the ruling and then decide on further action”.
It added: “Deutsche Lufthansa AG has already fully repaid the stabilisation measures which have been approved by the European Commission as well as around €92 million in interest rates.”