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The European Commission has made mistakes in assessing state aid to airlines Lufthansa and SAS.

According to the European judges, the Commission made errors of assessment when authorizing this state aid. The General Court has annulled the approval of the corona package. Lufthansa has since repaid the aid.

The General Court annuls the Commission's decision to approve the EUR 19 billion recapitalization of Lufthansa by Germany in the context of the COVID-XNUMX pandemic The Commission committed several errors, in particular by hold that Lufthansa was unable to obtain funding from the markets for the entirety of its needs by not requiring the establishment of a mechanism to incentivize Lufthansa to repurchase Germany's capital injections as soon as possible, by denying that Lufthansa has significant market power at certain airports, and by accepting certain commitments which do not ensure effective competition in the market.

On 12 June 2020, the Federal Republic of Germany notified the European Commission of individual aid to Deutsche Lufthansa AG in the form of a recapitalization of EUR 6 billion. This recapitalization, which was part of a series of more far-reaching support measures in favor of the Lufthansa group, was aimed at restoring the balance sheet position and liquidity of the companies of that group in the exceptional situation resulting from the COVID-19 pandemic .

DLH is the parent company at the head of the Lufthansa Group, which includes the airlines Lufthansa Passenger Airlines, Brussels Airlines SA/NV, Austrian Airlines AG, Swiss International Air Lines Ltd and Edelweiss Air AG.

The measure in question consisted of three separate components, namely a capital participation of approximately EUR 300 million, a silent participation which could not be converted into shares of approximately EUR 4,7 billion and a silent participation of EUR 1 billion with the characteristics of a convertible bond.

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Lufthansa received 2020 billion euros in corona support from the German state in 6.

Without opening the formal investigation procedure under Article 108(2) TFEU, the Commission has found the measure in question to be compatible with the internal market under Article 107(3)(b) TFEU3 and its Communication on the Temporary Framework on State aid to support the economy in the current COVID-19 outbreak.

According to Article 107(3)(b) TFEU, aid to remedy a serious disturbance in the economy of a Member State may, under certain conditions, be considered compatible with the internal market.

The ruling is a blow to the Commission and a win for Ryanair. The airlines Ryanair DAC and Condor Flugdienst GmbH have two appeals annulment of this decision granted by the General Court because the Commission, when adopting the contested decision, failed to comply with a number of conditions and requirements laid down in the Temporary Framework.

Nor should the Danish and Swedish governments have supported airline SAS with almost 1,1 billion euros.

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NS