Ryanair Secures Appeals Against Aid to Lufthansa and SAS

Cleary Gottlieb successfully assisted Ryanair before the EU General Court in winning its appeals against the European Commission decisions authorizing a total of €7 billion recapitalization aid to Lufthansa and SAS airlines (€6 billion from Germany to Lufthansa and €1 billion from Denmark and Sweden to SAS).

The General Court annulled the aid measure granted to Lufthansa, finding that the Commission committed several errors. Notably, the Commission erred by considering that Lufthansa was unable to obtain financing on the markets for the entirety of its needs, failing to require a step-up mechanism to incentivize Lufthansa to buy back Germany’s shareholding, denying that Lufthansa held significant market power at certain airports, and accepting commitments that did not preserve effective competition.

The General Court also annulled the aid measure granted to SAS, finding that the Commission failed to demonstrate that the overall structure of the measure, consisting of a hybrid capital instrument and an equity instrument, incentivized SAS to buy back Sweden’s and Denmark’s shareholding in line with the step-up mechanism required by the COVID-19 Temporary Framework.

The General Court annulled both aid measures in their entirety. The judgments mark the first time the EU General Court has annulled COVID-19 recapitalization measures.

Cleary is assisting Ryanair before the EU Courts in a total of 34 appeals against Commission decisions authorizing State aid granted by a number of Member States to rival air carriers during the COVID-19 pandemic.

The judgments for Cases T-34/21 (Lufthansa) and T-238/21 (SAS) were issued on May 10, 2023.