Ryanair Holdings Plc won a European Union court challenge to topple regulatory approval for a €6 billion-euro ($6.6 billion) recapitalization of Deutsche Lufthansa AG amid the Covid-19 pandemic.
The EU General Court in Luxembourg on Wednesday annulled the European Commission’s decision, saying its 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.”
The impact of the ruling on Lufthansa could be relatively limited, since it has repaid the bailout and Germany has sold its stake — making a profit for taxpayers, according to Chief Executive Officer Carsten Spohr. Lufthansa declined to immediately comment on the court ruling, saying it would examine it first.
In total, Lufthansa received some €9 billion of state aid during the pandemic, the bulk of it from Germany, which obtained a 20% stake in carrier, with contributions from Switzerland, Austria and Belgium.
Wednesday’s case concerns the German government’s plan to pay 300 million euros for a 20% stake and make two so-called silent participations of €4.7 billion and €1 billion in the company’s capital.
The commission in June 2020 approved the Lufthansa measures, saying a government plan to take a 20% stake in Europe’s largest airline was in line with the bloc’s state-aid rules and would prevent the carrier’s collapse.
Ryanair also won a separate bid to topple the EU’s 2020 approval of similar aid to SAS AB.
SAS initially received aid from Sweden, Denmark and Norway but then struggled to obtain added relief from bondholders and shareholders, including Sweden’s Wallenberg family. The airline filed for US Chapter 11 bankruptcy protection in July 2022, and creditor Apollo Global Management plans to take a majority stake, according to Reuters.
Read More: Lufthansa’s $6.7 Billion German Recapitalization Gets EU Nod
--With assistance from Benedikt Kammel, William Wilkes and Anthony Palazzo.
(Updates with details of aid package starting in third paragraph)
