Ryanair wins EU fight over covid aid for Lufthansa, SAS
A European Union court toppled Germany’s massive bailout of Deutsche Lufthansa AG at the height of the Covid-19 pandemic, backing Ryanair Holdings Plc’s claims that the package unfairly tilted competition toward its rival. Terms of a E6b recapitalization approved by the European Commission were too favorable to Lufthansa, and demands that Europe’s biggest network carrier forfeit take-off and landing rights in Frankfurt and Munich were structured in a way that didn’t provide a realistic chance for competition, the court ruled. The decision casts a shadow over Lufthansa’s post-pandemic recovery, potentially forcing the commission to make retroactive adjustments to the airline’s bailout package. The measures could be fairly limited, given Lufthansa has already paid back the aid. But if the commission establishes that the company unfairly benefited, it could impose financial penalties or ask it to divest more slots in Germany — where Ryanair CEO Michael O’Leary claims Lufthansa enjoys a “quasi-monopoly.” The court also sided with Ryanair on a challenge to state aid to Sweden’s SAS AB. The Irish discount carrier has a similar case pending over the bailout of Air France-KLM. The Brussels-based commission said it will “carefully study the judgment and reflect on possible next steps.” Wednesday’s judgment can be appealed. The commission allowed deep-pocketed national governments to weigh in too strongly on the side of ailing flag-carrier airlines, Ryanair said. “Today’s judgments confirm that the commission must act as a guardian of the level playing field in air transport and cannot sign off discriminatory state aid under political pressure by national governments,” the airline said. In annulling the commission’s decision to approve the aid package, the EU General Court in Luxembourg on Wednesday said the commission’s assessment included “several errors” and that it was wrong to consider that Lufthansa “was unable to obtain financing on the markets for the entirety of its needs.” CEO Carsten Spohr has pointed out that German taxpayers made a profit when the government sold its 20% stake that came with the bailout. “Lufthansa will analyze the ruling and then decide on further action,” the company said. <br/>
https://portal.staralliance.com/cms/news/hot-topics/2023-05-11/star/ryanair-wins-eu-fight-over-covid-aid-for-lufthansa-sas
https://portal.staralliance.com/cms/logo.png
Ryanair wins EU fight over covid aid for Lufthansa, SAS
A European Union court toppled Germany’s massive bailout of Deutsche Lufthansa AG at the height of the Covid-19 pandemic, backing Ryanair Holdings Plc’s claims that the package unfairly tilted competition toward its rival. Terms of a E6b recapitalization approved by the European Commission were too favorable to Lufthansa, and demands that Europe’s biggest network carrier forfeit take-off and landing rights in Frankfurt and Munich were structured in a way that didn’t provide a realistic chance for competition, the court ruled. The decision casts a shadow over Lufthansa’s post-pandemic recovery, potentially forcing the commission to make retroactive adjustments to the airline’s bailout package. The measures could be fairly limited, given Lufthansa has already paid back the aid. But if the commission establishes that the company unfairly benefited, it could impose financial penalties or ask it to divest more slots in Germany — where Ryanair CEO Michael O’Leary claims Lufthansa enjoys a “quasi-monopoly.” The court also sided with Ryanair on a challenge to state aid to Sweden’s SAS AB. The Irish discount carrier has a similar case pending over the bailout of Air France-KLM. The Brussels-based commission said it will “carefully study the judgment and reflect on possible next steps.” Wednesday’s judgment can be appealed. The commission allowed deep-pocketed national governments to weigh in too strongly on the side of ailing flag-carrier airlines, Ryanair said. “Today’s judgments confirm that the commission must act as a guardian of the level playing field in air transport and cannot sign off discriminatory state aid under political pressure by national governments,” the airline said. In annulling the commission’s decision to approve the aid package, the EU General Court in Luxembourg on Wednesday said the commission’s assessment included “several errors” and that it was wrong to consider that Lufthansa “was unable to obtain financing on the markets for the entirety of its needs.” CEO Carsten Spohr has pointed out that German taxpayers made a profit when the government sold its 20% stake that came with the bailout. “Lufthansa will analyze the ruling and then decide on further action,” the company said. <br/>
