Approval of state aid to German carrier Condor has been overturned by the European General Court because it was granted without a formal investigation procedure.

Condor had been under pressure from the collapse of its former parent, leisure company Thomas Cook, and the European Commission approved €321 million ($346 million) of restructuring aid in July 2021.

But budget airline Ryanair contested the decision.

The General Court has ruled that Ryanair has established that the Commission “should have had doubts” as to whether the measures satisfied requirements relating to “adequate burden sharing” and whether they limited distortion of competition.

Condor A330neo-c-Airbus

Source: Airbus

Condor was granted aid after former parent Thomas Cook collapsed

“There is nothing in the contested decision to suggest that the Commission ascertained whether the aid at issue had been granted on terms that would afford Germany a reasonable share of future gains in the value of Condor,” the court states.

But it points out that Ryanair has “not demonstrated” that the aid was liable to have a substantial adverse effect on competition.

While the General Court is allowing Ryanair’s application to annul the decision, it says the carrier cannot challenge the content of the decision on merits, and can only contest it to the extent that it is seeking to protect procedural rights in the context of a formal investigation.