On 10 May 2023, the EU’s General Court has annulled a European Commission decision to approve a €6 billion bailout package for Lufthansa as a consequence of the Covid-19 pandemic.
The court ruled that the Commission failed to give a proper justification for why the German airline was given better treatment than its competitors to cope with the negative impacts of the Covid-19 pandemic. The ruling was on a challenge by competing airlines Ryanair and Condor, which claimed the package gave Lufthansa an unfair advantage.
The court analyzed the case inter alia against the Commission’s Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak. The court also found that the Commission erred in its assessment of Lufthansa’s potential market power at Frankfurt and Munich airports and that it did not properly examine the structure and particular characteristics of the market. The court said the Commission’s decision was not sufficiently transparent, and there was no clear reasoning behind it. The ruling could have implications for other state aid packages approved by the EU during the Covid-19 pandemic.
Reference: Joined Cases T-34/21 and T-87/21 / ECLI:EU:T:2023:248.