The European Court of Justice nullified the decision of the European Commission to approve the German government’s multi-billion-dollar plan to rescue Lufthansa Airlines during the COVID-19 pandemic. The plan involved the German state recapitalizing the airline with an amount of €6 billion, or approximately $6.5 billion at the current exchange rate. The Court of First Instance, which resolves issues of competition and state aid, stated that the Commission made several mistakes, including considering that Lufthansa “was unable to finance itself on the markets” to meet its capital needs.
The impact of this decision, which can be appealed by the Commission to the European Court of Justice, based in Luxembourg, is currently uncertain. The airline was already fully back in private hands after the state sold off its remaining stakes last September, which it had acquired in 2020. Lufthansa said it would “analyze the verdict and then decide what to do.” The case was initiated by a lawsuit filed by low-cost airlines Ryanair and Condor, which requested the annulment of the aid plan. The restrictions imposed during the COVID-19 pandemic virtually paralyzed Lufthansa’s operations, putting it on the verge of bankruptcy.
The European Court of Justice ruled against the European Commission’s approval of Germany’s €6 billion plan to rescue Lufthansa during the pandemic. Ryanair and Condor had requested the aid plan’s annulment. The Commission had made mistakes, including thinking that Lufthansa couldn’t finance itself. The effect of the decision, which can be appealed, is unclear as the state had already sold off its shares last year and the airline is now privately owned again. Lufthansa said it would assess the verdict and make a decision. The pandemic’s restrictions had severely impacted Lufthansa, nearly leading to bankruptcy.
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