Ryanair has successfully won its challenge opposing German state aid for Frankfurt-based airline Condor. The ruling today by the EU General Court judges halts Germany’s decision to give a €550 million ($670 million) loan to Condor following a challenge by Ryanair. In May, Europe’s second-highest court declared an EU-approved scheme for KLM and TAP Portugal invalid.
Ryanair says that the loan to Condor and other European airlines was unfair as all airlines in Europe had suffered the same during the COVID-19 pandemic. Ryanair complained that while it and other airlines contribute to the economy and connectivity of Germany, the German state was only willing to help its own carriers.
Ryanair also pointed out to the court that Condor had previously benefitted from a €380 million German loan to rescue it from bankruptcy following the collapse of its parent company Thomas Cook in 2019.
Stay informed: Sign up for our daily and weekly aviation news digests.
Ryanair calls state aid unfair
In its ruling, the Luxembourg-based General Court said that Condor would not be required to repay the loan right now due to the ongoing pandemic and the pending new decision by the European Commission. When reporting on today’s events, Reuters quotes the court as saying,
“The General Court annuls the Commission decision approving the state aid granted by Germany to the airline Condor Flugdienst on the ground of an inadequate statement of reasons.”
The Irish low-cost carrier has complained about state-aid throughout the pandemic, saying that it creates an unfair advantage. It claims this action will allow airlines that received aid to emerge stronger from the crisis than airlines that received no help.
Ryanair praised the courts ruling
Regarding today’s ruling, Ryanair issued a statement praising the annulment of the European Commission’s approval of State aid for to Condor, saying,
“The German government aid to Condor – both in 2019 and 2020 – went against the fundamental principles of EU law and has distorted the market to the detriment of consumers. Today’s ruling is an important victory for consumers and competition.”
“During the COVID-19 pandemic, over €30bn in discriminatory State subsidies have been gifted to EU flag carriers. Unless halted by the EU Courts in line with today’s ruling, the effects of market distortion caused by this State aid will be felt for decades. If Europe is to emerge from this crisis with a functioning single market, the European Commission must stand up to national governments and stop rubberstamping discriminatory State aid to inefficient national airlines.”
Many national flag carriers received aid
Ryanair says that the European Union Commission has been spineless in its approach to state aid since the beginning of the pandemic and has allowed governments within the EU to write open-ended checks to their failing national airlines, citing the following airlines as having received government aid:
- Air France-KLM 14.4 billion euros
- Lufthansa Group 11 billion euros
- Alitalia 3.5 billion euros
- SAS 1.3 billion euros
- TAP Portugal 1.6 billion euros
- Finnair 1.2 billion euros
- Norwegian 0.8 billion euros
- LOT Polish 0.65 billion euros
- Condor 0.6 billion euros
- Air Europa 0.5 billion euros
Calling the past year the most challenging in its 35-year history Ryanair said that the COVID-19 pandemic could cost it over a billion euros.
What do you think about today’s ruling, and do you think Ryanairs’ complaints are justified? Please tell us what you think in the comments.