RYANAIR HAS LOST a challenge in the EU courts in its bid to block a €320m German bailout of a rival airline, Condor, during the Covid-19 pandemic.
The Court of Justice of the EU ruled that the German aid for the rescue of Condor was compatible with EU law.
The Luxembourg-based court dismissed Ryanair’s application to overturn the European Commission’s decision to allow the German government to provide such financial assistance.
Germany announced the aid package for Condor after it filed for insolvency in September 2019 due to its parent company, Thomas Cook, being placed into liquidation.
In response, the German government notified the European Commission that it would provide rescue measures for a six-month period by enabling the airline to reach a settlement with its creditors and a decision on its potential sale.
However, the charter and holiday airline collapsed after a potential buyer pulled out in April 2020 when flights were grounded across Europe during the pandemic.
In its ruling, the CJEU rejected Ryanair’s claim that the European Commission had erred in law in approving the German rescue package without conducting a formal investigation procedure.
It also found that Ryanair had not succeeded in rebutting the Commission’s findings that Condor’s difficulties were the result mainly of the Thomas Cook group being placed into liquidation and not the arbitrary allocation of costs within the group.
The court said the Commission was not obliged to await the outcome of discussions concerning the possible sale of Condor for the purpose of resolving its financial difficulties given the urgency of providing any rescue aid.
The court said the Commission had also correctly concluded that there was a risk of disruption to an important service which was hard to replicate as Condor’s insolvency resulted in up to 300,000 of the airline’s customers needing to be repatriated immediately.
It rejected Ryanair’s claims that the Commission carried out an incomplete and insufficient examination of conditions for rescue aid.
The German government had originally signalled it would provide €550m in financial assistance to Condor but the Commission ruled in July 2021 that it would allow €321.2m to be provided to the airline in loans and write-offs.
Ryanair has challenged and lost a series of appeals against the Commission’s support of rescue packages by EU member states totalling around €30bn for airlines negatively impacted by the pandemic.
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