The General Court of the European Union once again ruled in favour of Ryanair on Wednesday 9 June, annulling, on the grounds of insufficient justification, a European Commission decision approving the granting of German State aid to the airline Condor Flugdienst (case T-665/20).
However, the effects of the annulment of the decision, including the recovery of the aid, are suspended pending a new Commission decision.
At the end of April 2020, the Commission had determined that German State aid of EUR 550 million to Condor in the form of two guaranteed loans with subsidised interest was compatible with the internal market (Article 107(2) TFEU). This measure was intended to compensate the German company for damages directly incurred after the cancellation or rescheduling of its flights due to health restrictions imposed to combat the Covid-19 pandemic.
In September 2019, Condor filed for insolvency due to financial difficulties arising from the liquidation of its owner, the tour operator Thomas Cook. This insolvency procedure was extended in April 2020, as the investor interested in buying Condor withdrew its offer (see EUROPE 12348/25).
The General Court ruled in favour of the Irish airline when Ryanair appealed against the German State aid. It stated that the Commission should have given reasons for including the additional costs of prolonging Condor’s insolvency proceedings in the calculation of the damage that could be compensated by the State aid in question.
However, the Commission limited itself to considering that it was “legitimate” to add these additional costs without explaining in a sufficiently clear and precise manner the reasons why it considered that the decisive cause of these costs lay in the cancellation and rescheduling of flights imposed in the context of the pandemic. In addition, the General Court notes that there is nothing in the contested decision to indicate that the sale of Condor failed because of the health situation.
In mid-May, the General Court handed down a relatively similar judgment on aid granted to KLM and TAP (see EUROPE 12722/24).
See the judgment: https://bit.ly/3io6KHU (Original version in French by Mathieu Bion)