The Court of Justice of the European Union (CJEU) has formally dismissed Lufthansa’s appeal, confirming the annulment of the approval for state aid received during the COVID-19 pandemic. This ruling represents a definitive victory for Ryanair, which spearheaded the legal challenge against the German carrier’s recapitalization.
Judicial Ruling and Annulment of the Recapitalization
Europe’s highest court has upheld the previous ruling by the General Court, which had voided the European Commission’s decision to authorize the airline’s financial bailout. According to the court’s statement, the appeal filed by Lufthansa was rejected in its entirety, validating the stance that the recapitalization process failed to comply with existing competition regulations.
This legal conflict dates back to 2023, when a challenge presented by Ryanair led the court to declare the €6 billion aid package granted by the German state illegal.
Reactions from the Involved Airlines
Lufthansa’s Position
The German flag carrier stated that it has taken note of the ruling. However, the airline highlighted an ongoing investigation by the European Commission, initiated in 2024, which aims to issue a new decision on the case. The airline stated the following:
- Close contact will be maintained with all relevant institutions.
- The European Commission’s new investigation can now take the grounds of the CJEU ruling into account.
- The company will participate constructively in the process to reach a final resolution.
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Ryanair’s Claim
For its part, Ryanair celebrated the decision, noting that the bailout was a measure that distorted competition and encouraged inefficiency. The Irish low-cost carrier maintains that:
- The €6 billion bailout was illegal state aid from its inception.
- Lufthansa has so far avoided repaying approximately €200 million in benefits derived from this support, including accrued interest.
- The European Commission should have compelled Germany to recover these funds immediately following the initial ruling in 2023.
Operational Challenges and Internal Crisis at Lufthansa
The ruling comes at a highly complex time for the German group. Lufthansa is currently embroiled in a labor dispute with its pilots’ union over pension disagreements, which has resulted in several days of industrial action.
As a consequence of these industrial disputes and rising fuel prices, the company has taken drastic operational measures:
- Flight Reductions: The cancellation of 20,000 short-haul flights in its schedule through October has been announced.
- Fleet Reduction: The permanent retirement of 27 aircraft from the CityLine subsidiary.
- Financial Impact: Costs linked to industrial actions have forced significant adjustments to the company’s operating capacity.
The conclusion of this judicial process leaves the European Commission with the task of drafting a new resolution that aligns with current legal frameworks.
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