The judges said the Commission breached the bloc’s temporary COVID-19 state-aid framework when it accepted the method for pricing shares if a 1 billion-euro “silent participation” instrument were converted into equity, even though the court also said the lower tribunal had been too strict on several other points.
In its Court of Justice press release and the full judgment, the court said that single defect was enough to keep the Commission’s 2020 approval annulled. The recapitalization package combined about 300 million euros in equity, a 4.7 billion-euro non-convertible silent participation and a 1 billion-euro tranche with convertible-debt features that later became central to the case.
Lufthansa state aid setback does not end the Brussels review
The ruling does not close the file in Brussels. The European Commission opened an in-depth investigation in July 2024 to reassess whether the measure complied with EU state-aid rules after the 2023 General Court judgment wiped out the original clearance.
Lufthansa said it would “engage constructively” in that process, and the immediate financial hit appears limited. According to Lufthansa’s stabilization disclosures, the group repaid the drawn German stabilization measures in 2021, while Germany sold its remaining stake in September 2022, ending the last restrictions tied to the rescue.
How the Lufthansa state aid case reached this point
The fight dates back to the first summer of the pandemic. Germany notified the measure on June 12, 2020, and the Commission gave the bailout a green light on June 25, 2020, in its 2020 approval decision, arguing the recapitalization was needed to address the economic shock caused by COVID-19.
Ryanair and Condor challenged that approval, saying the Commission had been too quick to bless a rescue that distorted competition. In May 2023, the General Court agreed and annulled the decision, opening the door to Lufthansa’s appeal and the Commission’s later re-examination.
For readers following the saga over time, Reuters chronicled the dispute at each stage — from its June 2020 reporting on the bailout approval, to its May 2023 account of the General Court annulment, to its July 2024 coverage of Brussels’ reopened probe — underscoring how a pandemic rescue turned into a multiyear competition fight.
The legal nuance in Thursday’s decision matters. The Court of Justice did not endorse every criticism leveled by the General Court in 2023; instead, it said the lower court had overreached on several issues, including parts of its analysis of market financing, Germany’s exit incentives and competition at certain airports. But because one error over the conversion-pricing method was enough to sink the Commission’s approval on its own, Lufthansa still lost.
What comes next for Lufthansa state aid
The next move now returns to the Commission, which must decide whether Germany’s rescue can be cleared again on a sounder legal basis or whether the case will force a stricter reading of how member states support national champions in a crisis. Either way, Thursday’s ruling hardens an uncomfortable reality for Lufthansa: even after the money has been repaid, the legality of one of Europe’s biggest airline bailouts is still being judged in public.
