German leisure carrier Condor has secured re-approval for a €321 million ($367 million) restructuring package, a year after the European Union’s General Court annulled the previous clearance.
The annulment in May 2024 resulted from a case brought by budget operator Ryanair.
In its judgement the court stated that the European Commission should have conducted a formal investigation regarding several aspects of the aid package.
These included such considerations as whether the German government received “sufficient upsides”, says the Commission, ensuring a sharing of the restructuring burden by shareholders and debtholders.
The Commission, which originally cleared the package in July 2021 before the court’s annulment, says its renewed decision “takes into account” the judgement and follows an in-depth investigation.
“Condor is implementing a comprehensive package of restructuring measures that will ensure its return to long-term viability,” it states
Both the airline and private investor Attestor are “making a significant own contribution” to the cost of restructuring, it adds, funding over 70% of the expense.
“Existing shareholders lost the entire value of their investment. This means full burden-sharing is achieved, no moral hazard issues arise from the aid, and Germany has received a sufficient share in future upsides,” the Commission points out.
It also concluded that the aid has “adequate safeguards” to limit distortion of competition in the market.
