In a judgment handed down on Wednesday 18 May (case T-577/20) (see EUROPE 12348/25), the General Court of the European Union rejected, in its entirety, the appeal by the airline Ryanair against the European Commission’s decision of October 2019 validating €380 million of emergency German public aid granted to the German company Condor Flugdienst, which had found itself in great difficulty after the liquidation of the tour operator Thomas Cook, which owned it at 100%.
In particular, the General Court dismisses the complaint alleging infringement of point 22 of the Commission’s 2014 Guidelines on State aid for rescuing and restructuring firms in difficulty other than financial institutions. According to this point 22, a company belonging to a group is not eligible for public aid except where it can be demonstrated that the company’s difficulties are intrinsic and are not the result of an arbitrary allocation of costs within the group, and that the difficulties are too serious to be dealt with by the group itself.
According to the European judge, Ryanair did not succeed in rebutting the Commission’s findings that Condor’s difficulties were the result mainly of Thomas Cook being placed into liquidation and not of an arbitrary allocation of costs within the group. This conclusion is not called into question by the finding that Condor’s difficulties were connected with the write-off of significant amounts of receivables it held against the group in the context of the pooling of that group’s cash that had been in place for several years.
Nor has the Irish company demonstrated that there are any doubts regarding the condition in point 22 of the guidelines that Condor’s difficulties are too serious to be resolved by the group itself. Thomas Cook itself was in liquidation and had ceased trading.
Lastly, according to the General Court, the service provided by Condor was sufficiently important to be liable, in the event of interruption caused by the absence of the aid at issue, to give rise to serious social difficulties or a major market failure. The immediate repatriation of Condor’s 200,000 to 300,000 passengers to 50 to 150 different destinations could not have been provided by other competing airlines at short notice.
In June 2021, again at the request of Ryanair, the General Court had annulled German State aid of €550 million to Condor for damages suffered during the Covid-19 pandemic, which the Commission had approved (see EUROPE 12737/25).
See the General Court’s judgment: https://aeur.eu/f/1p0 (Original version in French by Mathieu Bion)