Ruling postponed on Ryanair’s challenge to rival’s bailout

European judges have postponed a ruling on a Ryanair challenge to Germany's €320 million bailout of rival airline Condor during the Covid-19 crisis.

Ryanair asked the European courts to overturn a European Commission decision to allow the German government to lend Condor €550 million in April 2020 for damage done by Covid flight cancellations.

The General Court of the European Union was due to rule on Ryanair's challenge to the commission's decision on Wednesday, but postponed its judgment until further notice.

Last June the court stalled the commission’s decision to allow the aid, but did not rule finally on whether the aid was illegal. Instead judges told officials to reexamine the German deal to ensure it complied with EU law.

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Charter and holiday airline Condor was part of travel group Thomas Cook, which collapsed in 2019, forcing the German carrier into insolvency.

Efforts to rescue it failed when a potential buyer pulled out in April 2020 after Europe-wide restrictions grounded air travel.

Thomas Cook

Ryanair argued that the commission had failed to take into account that Condor’s insolvency had resulted from Thomas Cook’s failure and not Covid-19, when it allowed the German government to bail out the airline.

However, after re-examining the issue after last June’s court date, the commission said in July 2021 that it would allow the German government give a total of €321.2 million in loans and write-offs to aid Condor’s restructuring.

Commission vice-president Margrethe Vestager argued that the measures would allow Germany to compensate Condor directly for damage done to its business by Covid-19 travel restrictions.

The case was one of several taken by Ryanair challenging up to €30 billion in aid given by European governments to airlines in the wake of Covid-19.

Beneficiaries included Germany's Lufthansa, which received €11 billion through various measures and Air France KLM.

Ryanair mostly argued that European governments’ aid mostly favoured their former state carriers, giving them an unfair advantage over others, including the Irish airline.