EU Court of Justice rejects Germany’s 6 billion euro state-aid package for Lufthansa

Brussels – A definitive “no” to the 6 billion euros in state aid granted by the German government to the airline Lufthansa during the COVID-19 pandemic. This was ruled today by the Court of Justice of the European Union, confirming a decision previously made by the General Court.

The case began on 12 June 2020, when Germany notified the European Commission of a proposed individual aid measure in the form of a 6 billion euro recapitalization for Deutsche Lufthansa AG. The recapitalization, which was part of a wider series of support measures for the group, and, as explained to the Court, “was intended to restore the balance sheet position and
liquidity of the undertakings in that group owing to the exceptional situation caused by the COVID-19 pandemic.” 

Without opening a formal investigation, the Commission classified the recapitalization as permissible State aid, in accordance with the provisions of the Treaty on the Functioning of the European Union regarding aid that may be granted in the event of a “serious disturbance” of the economy. 

Rival Ryanair, along with Condor, spoiled the party by filing two appeals seeking annulment of the decision, which the EU General Court overturned on 10 May 2023. Lufthansa then appealed the ruling to the Court of Justice, which, however, upheld the General Court’s
ruling to annul the decision by which the Commission had approved the recapitalization of Lufthansa. 

This is because the Court found that “the General Court was correct to hold that the Commission had infringed the Temporary
Framework by accepting methods for determining the price of the shares at the time of the conversion of Silent
Participation II into equity.”