Following EU court ruling - EU Commission checks corona aid for Lufthansa
## EU Commission investigates Lufthansa's bailout
The EU Commission is conducting an investigation into the billions of euros in aid given to Lufthansa during the Corona Pandemic. The aim is to determine if the aid was in line with European state aid rules.
Background to the investigation is a judgment of the EU Court from about a year ago. The judges in Luxembourg had decided that the EU Commission could not have approved the aid in the amount of around six billion euros. The EU Commission had made several errors in their assessment, and the EU Court declared the Commission's approval invalid.
Competition authorities had to check more closely whether Lufthansa still had its own securities to obtain credits. In addition, the court criticized that the market power of Lufthansa at the airports was underestimated.
EU Commission re-examines Lufthansa aid
Now the Commission is re-examining its decision and will consider the market power of Lufthansa at the airports in Vienna and Düsseldorf. The authority emphasizes that the initiation of an investigation does not yet say anything about its results.
Travel restrictions during the pandemic had almost brought Lufthansa's business to a standstill. In the company with around 138,000 employees, thousands of jobs were at risk. Therefore, the German government supported the largest German airline in the spring of 2020.
Billions in aid not fully repaid
Germany, Austria, Switzerland, and Belgium had promised the Lufthansa Group a total of nine billion euros in aid, but not all of it was withdrawn. The largest share of the sum came from Germany, the home country of Lufthansa. Six billion euros including a 20% equity stake and silent participations came from the state-owned Economic Stabilization Fund (WSF), while the state-owned KfW Bank contributed a loan of over a billion euros. The European partners joined the aid package at a later stage.
The bailed-out company had fully repaid the aid by the end of 2022 and partly with its own debts. "We are better off on the market than with the taxpayer," Lufthansa CEO Carsten Spohr said. The German state has not lost any money under the hood but made a profit of around 760 million euros from interest and stock sales.
- The EU Commission is scrutinizing whether Lufthansa, having received billions in credit from various European countries during the Coronavirus pandemic, adhered to EU state aid regulations.
- The re-evaluation of Lufthansa's bailout by the EU Commission includes an analysis of the airline's market power in Luxembourg, Germany, Austria, and specifically at airports in Vienna and Düsseldorf.
- Lufthansa CEO Carsten Spohr expressed satisfaction with the airline's financial performance following the recovery from the pandemic, stating, "We are now more competitive on the market than relying on taxpayer aid."
- Despite Germany, Austria, Switzerland, and Belgium contributing over nine billion euros in aid to Lufthansa, the EU Commission's investigation aims to ensure compliance with EU regulations, as Germany, the primary contributor, retains substantial profits from interest and stock sales.
