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Ryanair wins legal challenge to rival airline aid package

Budget carrier hails latest decision as a ‘triumph for fair competition’, saying Condor aid breached fundamental principles of EU law

Condor was part of the Thomas Cook Group, which collapsed in 2019. Photograph: Bloomberg

Jack Power
Wed May 8 2024 - 12:07

A formal Ryanair complaint over a European Commission decision to greenlight a German aid package of more than €300 million to the Frankfurt-based Condor airline has been upheld by an EU court.

Germany had sought to provide €321 million in aid to help charter airline Condor restructure after it found itself in financial trouble following the collapse of its parent group.

It has also given €200 million to support the company during the Covid-19 pandemic.

The commission made a decision in July 2021 that the supports provided by Germany to the airline did not breach EU rules around state aid. Condor was part of the Thomas Cook Group, which collapsed in 2019, forcing the airline to file for insolvency, after which the German government stepped in to support the company.

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Ryanair had challenged the decision around the €321 million in restructuring supports, in a complaint the Irish airline filed with the General Court of the European Union. The commission, Germany and Condor had argued that the legal case should be thrown out.

In a decision on Wednesday, the Luxembourg-based court sided with Ryanair, annulling the decision of the commission to approve the aid. “The commission should not have approved the restructuring aid at issue without initiating a formal investigation procedure,” the court said in a statement.

“The objective of the aid was to support the restructuring and continuation of Condor’s operations, resolving the difficulties, which it faced owing to the insolvency of its former parent company Thomas Cook 1,” it said.

Ryanair had proved to a “sufficient degree” that the commission should have had doubts about approving the aid supports, it said.

However, the judgment said that Ryanair had not demonstrated that the aid was likely to have a “substantial adverse effect” on the Irish company’s competitive position in the market.

The EU court had initially suspended the state aid to the German airline shortly after the commission had approved it in 2021, pending a full ruling. The decision this week can be appealed on a point of law to the European Court of Justice.

In a statement, Ryanair said the commission’s approval of the aid to Condor “went against the fundamental principles of EU law” and the court’s decision was a “triumph for fair competition”. Ryanair criticised the fact the commission had not moved to recover “billions of euros in State aid” that had been given to other airlines.

A year ago, Ryanair won a separate European General Court case against €130 million in state aid funding for airlines set up by the Italian government during the Covid-19 pandemic. The court similarly struck down a decision by the European Commission to allow the aid measure.

Ryanair has taken several such actions challenging subsidies granted to rival airlines during the pandemic. Although at times, the rulings fell against Ryanair, it was successful in its fight against a €6 billion state aid package to German flag carrier Lufthansa.

Jack Power

Jack Power

Jack Power is acting Europe Correspondent of The Irish Times

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