EU Investigates German Support for Deutsche Lufthansa During Pandemic — Update

By Pierre Bertrand

The European Union is investigating whether financial support given by Germany to Deutsche Lufthansa during the Covid-19 pandemic complied with its rules on state aid.

The European Commission, the executive arm of the EU, said Monday that its in-depth investigation follows last year's annulment of 6 billion euros ($6.50 billion) used by Germany to recapitalize the company.

A Lufthansa spokeswoman said the German carrier group "has fully repaid the stabilization measures as well as around 92 million euros in interest early," adding that the stabilization of the company was already completed before last year's court ruling.

With border closures that nearly halted all international traffic, many governments came to the rescue of national carriers during the pandemic.

Germany's recapitalization effort was part of a larger support package that also included a state guarantee on a EUR3 billion government loan.

Lufthansa's financial support was challenged by Irish airline Ryanair and German carrier Condor over competition grounds.

The EC initially approved the effort in June 2020, but the General Court stuck it down in May 2023, saying the Commission had made several errors in approving the measure.

Among the elements the Commission will assess is whether the company was eligible for the aid, the EC said.

An appeal by Lufthansa is still pending, the Commission said.

Write to Pierre Bertrand at pierre.bertrand@wsj.com

(END) Dow Jones Newswires

July 08, 2024 08:59 ET (12:59 GMT)

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