Lufthansa takes fight over €6 billion Covid aid to top EU court

Deutsche Lufthansa AG is fighting a landmark ruling that toppled the European Union’s approval for its €6 billion ($6.6 billion) German recapitalization at the height of the Covid-19 pandemic.

Europe’s biggest network carrier on Monday said it filed an appeal at the EU Court of Justice against the May 10 judgment by a lower tribunal, which backed claims by Ryanair Holdings Plc that the state aid unfairly tilted competition toward its rival. 

Judges found that terms of the recapitalization approved by the European Commission were too favorable to Lufthansa.

The May ruling cast a shadow over the company’s post-pandemic recovery, potentially forcing the commission to make retroactive adjustments to the its bailout package, though the measures could be fairly limited because Lufthansa has already paid back the aid.

In the judgment, the EU’s General Court decided that demands for the airline to forfeit take-off and landing rights in Frankfurt and Munich were structured in a way that didn’t provide a realistic chance for competition.

The decision triggered a rare direct response from the bloc’s competition chief Margrethe Vestager who said that same evening that she was “aware of the uncertainty” generated by it “for the airlines concerned and the aviation sector at large.”

The EU commission said Monday that while it wouldn’t join Lufthansa in appealing at the bloc’s top court, it confirmed that another option remains to “evaluate whether to adopt a new decision on the measure, taking into consideration the court’s judgment.” 

Lufthansa said in an emailed statement that it “has already repaid the stabilization measures in full, as well as around €92 million in interest.” Its appeal was filed July 20, according to the court website.

The commission earlier this month said it had opened a new probe into a €1 billion Danish and Swedish recapitalization package for SAS AB. The EU’s lower court had toppled the commission’s earlier approval for the SAS aid on the same day as the Lufthansa decision.