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EU court annuls Lufthansa, SAS state aid approval

The European Union's General Court has annulled the European Commission's 2020 decisions authorising EUR6 billion euro (USD6.6 billion) in state aid to Lufthansa (LH, Frankfurt International) and SEK11 billion Swedish kroner (USD1.1 billion) to SAS Scandinavian Airlines (SK, Copenhagen Kastrup) by their respective governments.

The Court found that both decisions were taken with errors insofar as they were not compliant with COVID-specific state aid rules, even though they were substantially laxer than the normal policy of the European Union.

Regarding Lufthansa, the Court found that the Commission did not assess whether the airline could raise at least part of the requested state aid on the market, for example, by mortgaging its unencumbered aircraft. The Temporary Framework - the EU's COVID-era state aid rules - required that alternative means be considered, even if they would not be sufficient for the entire amount. The Court also established that the state aid did not include the mandatory step-up mechanism incentivising a quick repayment of the aid.

The judges further said the Commission committed "a...

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