EU Court confirms Lufthansa bailout during COVID-19 was illegal as Ryanair pushes for repayment

The EU’s highest court has definitively ruled against Lufthansa in a long-running legal battle over billions in pandemic-era state aid, confirming that the €6 billion bailout granted by Germany during COVID-19 breached EU competition rules.

In its April 23 judgment, the Court of Justice of the European Union dismissed Lufthansa’s appeal against a 2023 decision that had already annulled the European Commission’s initial approval of the aid package. That earlier ruling followed legal challenges brought by rival carriers Ryanair and Condor, who argued the support distorted fair competition.

The contested bailout, approved in 2020 at the height of the pandemic, included a €300 million capital injection and €5.7 billion in hybrid bonds—some convertible into equity—aimed at stabilising Lufthansa as global air travel collapsed.

Despite the court’s ruling, the practical consequences may be limited. Lufthansa has already repaid the bulk of the aid, though the airline acknowledged the decision and noted that a separate, ongoing review by the European Commission could still influence the case’s final implications.

Ryanair, however, has seized on the judgment to renew pressure on both Berlin and Brussels. The low-cost carrier argues that Lufthansa continues to benefit from approximately €200 million in financial advantages linked to the bailout—benefits it says should be recovered, with interest.

In a strongly worded response, Ryanair accused the German government of distorting the market by supporting a legacy carrier while competitors were forced to weather the crisis without similar backing. The airline also criticised the European Commission for failing to enforce repayment following the initial 2023 ruling.

The case underscores ongoing tensions within Europe’s aviation sector over state aid, competition fairness, and post-pandemic recovery—issues that continue to shape the industry’s regulatory landscape.