Lufthansa To Be Investigated Over COVID-19 Aid

The European Commission has opened up an investigation into the state aid that Lufthansa received during the COVID-19 global pandemic.

As airlines battled the effects of the global pandemic, the degree of support they received significantly altered, with some receiving major benefits and others nothing.

German flag carrier Lufthansa received significant support to keep it afloat during some of the company’s more challenging periods.

However, despite the EU approving the state aid several years ago, it is now cracking down and investigating whether aid from the German government is breaching rules.

The EU wants to better understand whether Lufthansa Group was eligible for state aid, considering its firm grip on the market and competition within the sector.

The state aid, valued at some 6 billion euros, included several equity payments to help stabilise the company.

On June 25, 2020, the Commission said it approved the recapitalisation measures notified by Germany. The Commission also found that the measures to be implemented were deemed compatible with the state aid rules at the time.

However, for this to be approved, Lufthansa needed to comply with many different commitments. These included bans on dividends, limitations of management remuneration, and bonus payments.

The press release says that following a judgment on 10 May 2023, the General Court considered that the measures previously approved didn’t meet all the conditions outlined in the COVID Temporary Framework.

The opening of an investigation isn’t a shock for Lufthansa, which believed something would come at some point, as it has done in the past for many other parties that have received aid during difficult times.