Court of Justice confirms annulment of Commission’s approval of EUR 6 billion Lufthansa COVID-19 recapitalisation
The Court of Justice (CJEU), in Case Deutsche Lufthansa v Ryanair and Condor Flugdienst (C-457/23 P)has upheld the General Court’s (GC) annulment of the Commission’s decision approving Germany’s EUR 6 billion recapitalisation of Lufthansa during the COVID-19 pandemic.
The Commission approved the measure under the COVID-19 Temporary Framework (TF) without opening a formal investigation. Ryanair and Condor challenged the decision, and the GC annulled it in 2023, finding that the Commission had misapplied key aspects of the TF, particularly regarding the valuation methodology for the conversion of Silent Participation II into equity.
In this judgment, the CJEU has confirmed that the GC was correct to find certain infringements of the TF sufficient to justify annulment. At the same time, it clarified that the GC had applied an excessively intrusive standard of review in several respects, including its findings on Lufthansa’s access to market financing, the absence of stronger incentives for buyback of the State’s shareholding, market power at certain airports, the adequacy of competition safeguards, and the statement of reasons.
The Court stressed that, in complex economic assessments under State aid control, the Commission enjoys broad discretion, and judicial review must be limited to manifest errors of assessment, without substituting the court’s own economic judgment. Nonetheless, because the confirmed errors regarding the TF were independently sufficient to invalidate the decision, the annulment of the Commission’s approval of the recapitalisation was upheld in full.
For more information, see the CJEU’s judgment.