The EU Commission was not allowed to approve the federal government’s billions in aid for Lufthansa during the pandemic. The Court of Justice of the EU – this is the first instance at EU level – decided in Luxembourg on Wednesday. However, appeals against the judgment can still be lodged with the European Court of Justice – that would be the second instance.
The travel restrictions in the pandemic had almost brought Lufthansa’s business to a standstill. Tens of thousands of jobs were at stake. That is why the federal government, then led by the CDU/CSU and SPD, supported the largest German airline in spring 2020 with an aid package worth billions. In return, Lufthansa had to undertake to avoid distortions of competition, such as handing over take-off and landing rights in Frankfurt and Munich to the competition.
The EU Commission approved the aid of six billion euros in June 2020. Lufthansa’s competitors Ryanair and Condor contested this decision by the EU Commission before the EU court. The judges partially agreed with them.
The EU Commission made several mistakes in its assessment. So she wrongly assumed that Lufthansa could not have obtained the necessary funds through loans on the financial market. In addition, the Commission did not push for a plan that would have created incentives for a rapid reduction in state participation. This is also a failure of the authorities.
In addition, they misjudged Lufthansa’s considerable market power at certain airports. According to the court, the obligations imposed on the company did not ensure that effective competition was preserved.
However, the money that Lufthansa received from the state has long since been repaid, and the state even made a profit from it. The practical consequences of the judgment are therefore still unclear. Lufthansa said it would analyze the verdict and then decide how to proceed. The EU Commission can also appeal.