10/7/2023 0 Comments Sas euro![]() ![]() īased on economic reports submitted by Ryanair, as well as public statements from Lufthansa’s Chief Financial Officer (CFO), the General Court upheld Ryanair’s argument that, even in a conservative scenario, Lufthansa could have raised between EUR 1-3.7 billion in debt financing by using its aircraft and spare parts as collateral (worth c. The General Court found that the Commission had failed to verify whether Lufthansa could have obtained at least part of its financing needs on the market at affordable terms pursuant to Recital 49(c) TF. Lufthansa Could Have Obtained at Least Part of its Financing Needs in the Market (Recital 49(c) TF) In the SAS judgment, the General Court similarly found that the Commission had failed to demonstrate that the “overall structure” of the measure, consisting of a hybrid capital instrument and an equity instrument, incentivized SAS to buy back Sweden’s and Denmark’s shareholding in line with the step-up mechanism required by the TF ( see also Section II below). In the Lufthansa judgment, the General Court found that the Commission had erred by (i) considering that Lufthansa was unable to obtain financing on the markets for the entirety of its needs ( see Section I below) (ii) failing to require a step-up mechanism, or a comparable alternative, to incentivize Lufthansa to buy back Germany’s shareholding ( see Section II below) (iii) accepting a price for Germany’s acquisition of Lufthansa’s shares at the time of the conversion of Silent Participation II into equity that did not comply with the TF ( see Section III below) (iv) denying that Lufthansa held significant market power (“SMP”) at a number of airports, including Vienna and Düsseldorf airports ( see Section IV below) and (v) accepting commitments from Germany that did not preserve effective competition ( see Section V below). The General Court found that the Commission committed multiple errors, each of which warranted the annulment of the decisions. The judgments mark the first time the General Court has annulled Commission decisions clearing recapitalization measures adopted under Section 3.11 of the COVID-19 Temporary Framework (“TF”), and the largest amount of previously cleared aid covered by an annulment judgment. On May 10, 2023, the General Court annulled two Commission decisions authorizing a total of EUR 7 billion recapitalization aid granted during the COVID-19 pandemic to air carriers Lufthansa and Scandinavian Airlines (“SAS”), following a challenge brought by rival airlines Ryanair and (for the Lufthansa decision) Condor: i.e., (i) EUR 6 billion from Germany to Lufthansa and (ii) EUR 1 billion from Denmark and Sweden to SAS.
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