The European Court of Justice (ECJ) has upheld European Commission approval of a combined EUR3.72 billion euros (USD4.2 billion) in COVID-19 state aid for KLM Royal Dutch Airlines and Condor, overturning lower court rulings that had annulled the respective approvals following challenges by Ryanair.

In two judgments delivered on November 5, 2026, the ECJ set aside the General Court's decisions, finding that it had exceeded the limits of its judicial review in the KLM case and that the Commission had correctly assessed the compatibility of the Condor restructuring aid with EU state aid rules.

The KLM case

The KLM ruling concerns EUR3.4 billion (USD3.8 billion) in Dutch state support, comprising a government guarantee for a bank loan and a direct state loan. The funding was intended to provide liquidity to the flag carrier during the pandemic.

The ECJ ruled in favour of appeals brought by the Commission, KLM, Air France, and Air France-KLM, finding that the General Court had substituted its own assessment for that of the Commission without demonstrating that the latter had committed a manifest error.

The General Court had ruled in February 2024 that the aid could also benefit Air France-KLM and Air France because of financial, operational, and structural links within the group.

The ECJ has referred the case back to the General Court to consider Ryanair's remaining legal challenges, including claims of discrimination and breaches of EU competition rules.

Air France-KLM welcomed the ECJ ruling, noting that all Covid-19 support received by the group, Air France, and KLM had been fully repaid, with interest, by 2023.

The Condor case

In the separate Condor case, the ECJ upheld the Commission's approval of EUR321 million (USD360 million) in German restructuring aid, setting aside a lower court ruling that had annulled the funding approval.

The state aid was intended to support Condor's restructuring and continued operations following the insolvency of its former parent company, Thomas Cook Group, and the impact of the pandemic.

The General Court had ruled that the Commission should have opened a formal investigation into the aid, questioning whether Germany would receive an adequate share of any future increase in Condor's value in return for its support.

The ECJ agreed that burden-sharing requirements could apply to debt write-offs but found that the Commission had implicitly determined that no further assessment was necessary because Condor's existing investors had already absorbed its losses. The ruling leaves Brussels' approval of the EUR321 million restructuring package intact.

ch-aviation has asked Condor for comment.