Court reinstates Condor restructuring aid, annulling Ryanair win

Condor Flugdienst GmbH ('Condor') appealed the General Court's judgment of 8 May 2024, Ryanair v Commission (Condor; restructuring aid) (T-28/22), by which the General Court had annulled Decision C(2021) 5729 final of the European Commission of 26 July 2021 on State aid SA.63203 for Condor. In Case C-505/24 P, backed by the Commission and Germany, the Court of Justice (Third Chamber) set the General Court's judgment aside on 5 November 2026Europa, gave final judgment itself and dismissed Ryanair's action in its entiretyEuropa: Ryanair bears its own costs and pays those of Condor, the Commission and Germany for the appeal.

The approved measure had two parts: changed terms for the EUR 550 million State-guaranteed COVID-19 loans of 2020, plus a EUR 90 million write-off of that debt, and a EUR 20.2 million write-off of interest owed after the Commission found EUR 91.745 million of pandemic-damage overcompensation, plus interest. Attestor Ltd, whose acquisition of Condor was conditional on the aid, put EUR 450 million into the restructuring against EUR 321.18 million of aid, so its own contribution alone reached 77% of the restructuring financing, above the 50% threshold in point 64 of the restructuring guidelines.

The Court first confirmed the General Court on point 67's scope: the requirement that aid enhancing the beneficiary's equity position give the State a reasonable share of future gains in value applies to any such aid, including a partial debt write-off, not only to capital injections. The wording, the shared burden-sharing subsection and the anti-moral-hazard objective all point the same way; the Commission is bound by its own guidelines and cannot plead that its narrower reading was merely plausible, and the point 68 exception covers point 66 only.

But the Court upheld Condor's second groundEuropa: the future-gains requirement bites only where equity remains after losses have been absorbed by existing investors, namely incumbent shareholders and, where necessary, subordinated creditorsEuropa. The Commission had recorded in recital 135 of its decision that Condor's former parent Thomas Cook, being wound up, lost its shareholding's entire value with no share in any upside, while creditors wrote off almost all their claims, concluding in recital 136 that burden-sharing was appropriate. That assessment implicitly but necessarily answered point 67: with no equity left to share, no further examination was required, so the Commission had no doubts obliging it to open the Article 108(2) formal investigation. The linked criticism of the competition-distortion calibration, built on recital 150's reference back to recital 135, fell with it.

The Court then rejected Ryanair's remaining attacks: the fleet-reduction reasoning was sufficient, the claim spanning the 'one time, last time' condition to the whole Attestor group was unsubstantiated speculation, and the passage on rival airlines' aid concerned the fleet cut, not the aid itself. Selectivity alone cannot breach non-discrimination or the freedoms of services and establishment, since it is inherent in State aid and the choice of beneficiary was indissolubly linked to the measure's object; nor is the Commission required to provide specific reasoning on each principle of EU law in a decision not to raise objections. The appeal was admissible although the Commission had meanwhile adopted Decision (EU) 2025/2178 approving the same aid, which did not retroactively cure the annulled decision. Ryanair also pays the Commission's first-instance costs; Germany and Condor bear their own costs of those proceedings.

Legal basis: Article 107(3)(c) and Article 108 TFEU and points 61 to 70 of the Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty.