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EU Court Considers German Bailout For Thomas Cook Airline

 |  June 9, 2021

Ryanair persuaded the EU’s second-highest court Wednesday, June 9, that a COVID-19 bailout package for a German charter flight operator was against the the bloc’s rules, reported Corthouse News.

The Luxembourg-based General Court held on Wednesday that the European Commission should not have approved two loans totaling €550 million (US$670 million) from the German state to Condor Flugdienst GmbH.

“Since the contested decision is vitiated by an inadequate statement of reasons, this therefore requires the annulment of that decision,” the court’s 10th Chamber wrote. 

EU regulations typically prevent governments from supporting private companies on the grounds that it creates market distortions across the bloc, but Berlin argued that Condor had faced financial difficulty due to flight cancellations and rescheduling as a result of COVID-19 travel restrictions.

In opposing the aid, however, Irish budget airline Ryanair argued that Condor was not in financial straits because of the pandemic but rather because its parent company, Thomas Cook Group, had filed for bankruptcy. 

Founded in 1841, Thomas Cook began as a travel agency that focused on taking temperance supporters to anti-alcohol rallies across England. It became a global travel conglomerate, with 21,000 staff worldwide, before going under in 2019. 

The five-judge panel found that the EU failed to sufficiently investigate whether Condor’s financial troubles were a direct result of the pandemic, or because of its parent company’s ongoing insolvency. “It was incumbent on the Commission to examine with particular care whether the cancellation and rescheduling of Condor’s flights as a result of the travel restrictions imposed in the context of the COVID‑19 pandemic were in fact the decisive cause of the additional costs incurred by Condor as a result of the extension of the insolvency proceedings,” the court wrote. 

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