The aim is to clarify whether the aid was in line with European state aid rules. The background to the investigation is a ruling by the EU General Court from just over a year ago.
The judges in Luxembourg had decided that the EU Commission should not have approved the aid amounting to around six billion. The EU Commission had made several errors in its assessment, and the EU Court had therefore declared the Commission’s approval null and void.
The competition authorities should have examined more closely whether Lufthansa still had its own collateral to obtain loans. The court also criticized the fact that Lufthansa’s market power at the airports was underestimated.
The Commission is now reviewing its decision once more and will take into account Lufthansa’s market power at the airports in Vienna and Düsseldorf. However, the authority stresses that the initiation of an investigation does not say anything regarding its outcome.
Tens of thousands of jobs at risk
The travel restrictions during the pandemic had brought Lufthansa’s business to a virtual standstill. Tens of thousands of jobs were at risk in the group, which employs around 138,000 people. This is why the German government supported Germany’s largest airline in spring 2020.
Germany, Austria, Switzerland and Belgium had promised the Lufthansa Group a total of nine billion euros in aid, but this was not fully drawn down. The lion’s share of the sum came from Germany, Lufthansa’s home country. Six billion euros, including a 20 percent share package and silent partnerships, went to the federal government’s Economic Stabilization Fund (WSF), while the German state-owned KfW Bank contributed a loan of one billion euros. The European partners only joined the aid pact at a later date.
Debts repaid
The rescued company had repaid the aid in full by the end of 2022 and partly replaced it with its own debts. Lufthansa CEO Carsten Spohr explained that it would rather be in debt to the market than to the taxpayer. The bottom line is that the German state made a nominal profit of around 760 million euros from interest and share sales.
