Court of Justice of the European Communities (including Court of First Instance Decisions)

JUDGMENT OF THE GENERAL COURT (Eighth Chamber)

8 May 2024 (*) (1)

(State aid – German air transport market – Restructuring aid granted by Germany to an airline – Changes to the terms of loans granted by Germany and the partial write-off of debts – Decision not to raise any objections – Action for annulment – Locus standi – Admissibility – Safeguarding of procedural rights – Serious difficulties – Article 107(3)(c) TFEU – Point 67 of the Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty – Burden sharing)

In Case T‑28/22,

Ryanair DAC, established in Swords (Ireland), represented by E. Vahida, S. Rating and I.-G. Metaxas-Maranghidis, lawyers,

applicant,

v

European Commission, represented by I. Barcew, V. Bottka and J. Ringborg, acting as Agents,

defendant,

supported by

Federal Republic of Germany, represented by J. Möller, P.-L. Krüger and J. Buhl, acting as Agents,

and by

Condor Flugdienst GmbH, established in Neu-Isenburg (Germany), represented by A. Rosenfeld, S. Lünenbürger, A. Birnstiel and S. Blazek, lawyers,

interveners,

THE GENERAL COURT (Eighth Chamber),

composed of A. Kornezov (Rapporteur), President, G. De Baere and K. Kecsmár, Judges,

Registrar: S. Spyropoulos, Administrator,

having regard to the written part of the procedure,

further to the hearing on 22 September 2023,

gives the following

Judgment

1        By its action under Article 263 TFEU, the applicant, Ryanair DAC, seeks annulment of Commission Decision C(2021) 5729 final of 26 July 2021 on State aid SA. 63203 (2021/N) – Germany – Restructuring aid for Condor (‘the contested decision’).

 Background to the dispute

2        Condor Flugdienst GmbH (‘Condor’) is a German airline which operates charter flights. It provides air transport services to individual customers, tour operators and travel agencies from several airports, in particular in Germany, with a focus on the leisure travel market.

3        During the period of 2019-2021 Condor benefited from several State aid measures which may be categorised into two groups, namely, on the one hand, aid measures intended to resolve its financial difficulties caused by the insolvency of its former parent company, Thomas Cook Group plc (‘Thomas Cook’), and, on the other hand, aid measures to make good the damage it had suffered as a result of the imposition of travel restrictions linked to the COVID-19 pandemic.

4        First of all, following Thomas Cook’s insolvency, Condor received rescue aid, which was approved by Commission Decision C(2019) 7429 final of 14 October 2019 on State aid SA.55394 (2019/N) – Germany – Rescue aid to Condor (‘the decision on rescue aid’), on the basis of Article 107(3)(c) TFEU and the Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty (OJ 2014 C 249, p. 1; ‘the R&R Guidelines’). That decision was the subject of an action before the General Court, which was dismissed by judgment of 18 May 2022, Ryanair v Commission (Condor; rescue aid) (T‑577/20, EU:T:2022:301).

5        With the COVID-19 pandemic having in the meantime impacted the aviation sector, Condor was subsequently granted two consecutive individual aid measures in order to make good the damage incurred as a result of the imposition of travel restrictions linked to that pandemic in the period from 17 March to 31 December 2020 (‘the COVID-19 aid of 2020’) and from 1 January to 31 May 2021 (‘the COVID-19 aid of 2021’).

6        Accordingly, by Decision C(2020) 2795 final of 26 April 2020 on State aid SA.56867 (2020/N, ex 2020/PN) – Germany – Compensation for the damage caused by the COVID 19 outbreak to Condor (‘the decision on the COVID-19 aid of 2020’), the European Commission found that the COVID-19 aid of 2020, which took the form of two loans totalling EUR 550 million (‘the COVID-19 loans of 2020’), backed by a State guarantee, was compatible with the internal market on the basis of Article 107(2)(b) TFEU. The Commission found in that decision that since the amount of the damage suffered by Condor had been calculated on the basis of an ex ante estimate, the German authorities had undertaken to review ex post whether the amount of the aid exceeded the amount of the damage and to recover from Condor any overcompensation which might have arisen as a result.

7        By judgment of 9 June 2021, Ryanair v Commission (Condor; COVID‑19) (T‑665/20, EU:T:2021:344), the General Court annulled the decision on the COVID-19 aid of 2020 owing to a failure to state reasons, while suspending the effects of that annulment pending the adoption of a new decision by the Commission under Article 108 TFEU. The General Court ruled in essence that, having regard to the grounds of the decision at issue, it was impossible for it to verify whether the Commission was able to conclude, without having any doubts, that there was a direct causal link between, on the one hand, the costs incurred by Condor as a result of the extension of its insolvency procedure, which had been initiated because of its pre-existing difficulties which were not associated with the COVID-19 pandemic, with those costs having been included in the compensation provided for by the COVID-19 aid of 2020, and, on the other hand, the occurrence giving rise to the damage as defined in the decision at issue, namely the cancellation and rescheduling of Condor’s flights as a result of the travel restrictions imposed in the context of the COVID-19 pandemic (see, to that effect, judgment of 9 June 2021, Ryanair v Commission (Condor; COVID-19), T‑665/20, EU:T:2021:344, paragraph 61).

8        Following the judgment of 9 June 2021, Ryanair v Commission (Condor; COVID-19) (T‑665/20, EU:T:2021:344), the Commission, by Decision C(2021) 5730 final of 26 July 2021 on State aid SA.56867 (2020/N, ex 2020/PN) – Germany – Compensation for the damage caused by the COVID-19 outbreak to Condor (‘the amended decision on the COVID-19 aid of 2020’), found that the COVID-19 aid of 2020 was compatible with the internal market on the basis of Article 107(2)(b) TFEU. In order to comply with the aforementioned judgment, the Commission, first, in that decision excluded from the calculation of the damage suffered by Condor the costs it had incurred owing to the extension of the insolvency procedure. Second, on the basis of the ex post data provided by the German authorities, it found that Condor had received overcompensation of EUR 91.745 million, plus interest.

9        Subsequently, by Decision C(2021) 5731 final of 26 July 2021 on State aid SA.63617 (2021/N) – Germany COVID-19 – Condor damage compensation II (‘the decision on the COVID-19 aid of 2021’), the Commission concluded that the COVID-19 aid of 2021, which took the form of a partial write-off amounting to EUR 60 million of debt resulting from the COVID-19 loans of 2020, was compatible with the internal market on the basis of Article 107(2)(b) TFEU.

10      Lastly, by the contested decision, the Commission, on the basis of Article 107(3)(c) TFEU and the R&R Guidelines, approved an aid measure to support the restructuring and continuation of Condor’s operations (‘the measure at issue’), which comprises two parts. The first part consists in a modification to the terms of the COVID-19 loans of 2020 and a partial write-off of EUR 90 million of debt resulting from those loans. The second part involves the write-off of EUR 20.2 million of debt corresponding to the interest payable by Condor following the amended decision on the COVID-19 aid of 2020.

 Forms of order sought

11      The applicant claims that the Court should:

–        annul the contested decision;

–        order the Commission to pay the costs.

12      The Commission contends that the Court should:

–        dismiss the action;

–        order the applicant to pay the costs.

13      The Federal Republic of Germany and Condor contend that the Court should dismiss the action and order the applicant to pay the costs.

 Law

14      In support of its action, the applicant relies on 10 pleas in law, alleging, in essence: (i) that the measure at issue falls outside the scope of the R&R Guidelines; (ii) a manifest error of assessment with regard to demonstrating market failure and social hardship; (iii), (iv), (v) and (vi), that the Commission failed to establish, respectively, the need for State intervention and its incentive effect, that the restructuring plan is realistic, coherent and far-reaching and is suitable to restore Condor’s long-term viability, and the appropriateness or proportionality of the aid at issue; (vii) that the Commission erred in its examination of the negative effects of the measure at issue; (viii) infringement of the principles of non-discrimination, the free provision of services and free establishment; (ix) infringement of its procedural rights; and (x) breach of the duty to state reasons.

 Admissibility

15      First, the applicant submits that it is a party concerned for the purposes of Article 108(2) TFEU and an interested party within the meaning of Article 1(h) of Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 [TFEU] (OJ 2015 L 248, p. 9), and that it therefore has standing to bring proceedings in order to protect its procedural rights. Second, it argues that its competitive position on the market has been substantially affected by the measure at issue and that it is also entitled to challenge the contested decision on the merits.

16      The Commission and Condor do not dispute the standing of the applicant to bring proceedings in order to protect its procedural rights. They claim, however, that it is not entitled to challenge the contested decision on the merits.

17      In the present case, the Commission decided, following a preliminary examination, not to raise objections to the measure at issue on the ground that it was compatible with the internal market under Article 107(3)(c) TFEU and with the R&R Guidelines. Since the formal investigation procedure was not initiated, the interested parties that could have submitted comments during that stage were deprived of that possibility. In order to remedy this, they are entitled to challenge the Commission’s decision not to initiate the formal investigation procedure before the EU Courts. Accordingly, an action brought by an interested party, for the purposes of Article 108(2) TFEU, for annulment of the decision not to raise objections would be admissible in so far as that party would be seeking to safeguard the procedural rights available to it under that latter provision (see judgment of 18 November 2010, NDSHT v Commission, C‑322/09 P, EU:C:2010:701, paragraph 56 and the case-law cited).

18      In the light of Article 1(h) of Regulation 2015/1589, an undertaking competing with the beneficiary of an aid measure is an ‘interested party’ for the purposes of Article 108(2) TFEU (see, by analogy, judgment of 3 September 2020, Vereniging tot Behoud van Natuurmonumenten in Nederland and Others v Commission, C‑817/18 P, EU:C:2020:637, paragraph 50; see also, to that effect and by analogy, judgment of 18 November 2010, NDSHT v Commission, C‑322/09 P, EU:C:2010:701, paragraph 59).

19      There is no dispute in the present case that Ryanair competes with Condor and that it is therefore an interested party within the meaning of Article 1(h) of Regulation 2015/1589, with standing to bring proceedings in order to safeguard the procedural rights available to it under Article 108(2) TFEU.

20      As regards standing to challenge the merits of the contested decision, it should be observed that that decision is not a regulatory act within the meaning of the fourth paragraph of Article 263 TFEU inasmuch as it is not an act of general application (see, to that effect, judgment of 3 October 2013, Inuit Tapiriit Kanatami and Others v Parliament and Council, C‑583/11 P, EU:C:2013:625, paragraph 56). Consequently, the applicant must show that it is directly and individually concerned by that decision, for the purposes of the fourth paragraph of Article 263 TFEU.

21      In that regard, it is clear from settled case-law that persons other than those to whom a decision is addressed may claim to be individually concerned only if that decision affects them by reason of certain attributes which are peculiar to them, or by reason of circumstances in which they are differentiated from all other persons, and by virtue of those factors distinguishes them individually just as in the case of the person addressed (judgments of 15 July 1963, Plaumann v Commission, 25/62, EU:C:1963:17, p. 107; of 28 January 1986, Cofaz and Others v Commission, 169/84, EU:C:1986:42, paragraph 22; and of 22 November 2007, Sniace v Commission, C‑260/05 P, EU:C:2007:700, paragraph 53).

22      Accordingly, where an applicant calls into question the merits of a decision appraising aid, taken on the basis of Article 108(3) TFEU or after the formal investigation procedure, the mere fact that it may be regarded as ‘concerned’ within the meaning of Article 108(2) TFEU cannot suffice to render the action admissible. It must then demonstrate that it has a particular status for the purposes of the case-law referred to in paragraph 21 above. That applies in particular where the applicant’s position on the market concerned is substantially affected by the aid to which the decision at issue relates (see judgment of 15 July 2021, Deutsche Lufthansa v Commission, C‑453/19 P, EU:C:2021:608, paragraph 37 and the case-law cited).

23      As regards the factors accepted by the case-law for the purpose of establishing a substantial adverse effect of that kind, it should be borne in mind that the mere fact that an act may exercise an influence on the competitive relationships existing on the relevant market and that the undertaking concerned is in a competitive relationship with the beneficiary of that act cannot suffice for that undertaking to be regarded as being individually concerned by that act. Therefore, an undertaking cannot rely solely on its status as a competitor of the undertaking in receipt of aid (see judgment of 15 July 2021, Deutsche Lufthansa v Commission, C‑453/19 P, EU:C:2021:608, paragraph 60 and the case-law cited).

24      However, in the present case the applicant, in essence, relies merely on the fact that it competes with Condor on the relevant market and describes, in general terms, various aspects of that market, namely that it is ‘concentrated’, that competition on it is distorted by State aid granted to its competitors, that ‘[its] situation is exacerbated’ by the measure at issue, that it is ‘singled out as a significant player that has not received State aid’ and that there is ‘overcapacity on the German and broader EU market’.

25      However, such general assertions are not sufficient to establish that the measure at issue was liable to have a substantial adverse effect on the applicant’s competitive position on the market concerned.

26      First, the applicant disregards the circumstance, which is not disputed, that it was in competition with Condor only in relation to sales of ‘dry seats’, that is to say, seats sold directly to end customers, and that, unlike the applicant, Condor was a charter airline for which the sale of such ‘dry seats’ represented only a limited proportion of its sales. By contrast, it is apparent from the file that there was no competitive relationship between the applicant and Condor as regards the sale of flight tickets to tour operators and travel agencies, including for long-haul and niche flights, which was Condor’s main area of business. It follows that while the applicant was indeed a competitor to Condor, the competitive relationship between them was rather limited.

27      Second, the fact that the applicant, unlike Condor and other airlines, has not received State aid from the German State does not provide any information as to the actual impact of the measure at issue on its competitive position, contrary to what is required by the case-law. The same may be said of the claim that the market is ‘concentrated’ or characterised by ‘overcapacity’.

28      In those circumstances, it must be found that the applicant has not demonstrated that it is individually concerned by the contested decision and it therefore does not have standing to challenge that decision on the merits.

29      It follows that the first to eighth pleas, by which the applicant disputes the merits of the contested decision, are inadmissible.

30      By contrast, the ninth plea, by which the applicant seeks to protect its procedural rights, is admissible.

31      That being the case, the applicant can, in order to demonstrate infringement of its procedural rights on account of the doubts that the measure at issue should have raised as to its compatibility with the internal market, rely on arguments aimed at demonstrating that the Commission’s finding as to the compatibility of that measure with the internal market was incorrect, which, a fortiori, is such as to establish that the Commission should have had doubts regarding its assessment of the compatibility of that measure with the internal market. The Court is therefore entitled to examine the substantive arguments put forward by the applicant in its first to eighth pleas in law, to which the applicant refers in its ninth plea, in order to ascertain whether they are such as to support the plea expressly made by it regarding the existence of doubts justifying the initiation of the procedure under Article 108(2) TFEU (see, to that effect, judgment of 18 May 2022, Ryanair v Commission (Condor; rescue aid), T‑577/20, EU:T:2022:301, paragraph 20 and the case-law cited).

 Substance

32      In its ninth plea, alleging infringement of its procedural rights, the applicant, in essence, puts forward eight items of evidence relating to the content of the contested decision, corresponding to its first eight pleas, said to show that the Commission should have had doubts during the preliminary examination of the measure at issue.

33      According to the case-law, where the Commission is unable to reach a firm view, following an initial examination in the context of the procedure under Article 108(3) TFEU, that a State aid measure either is not ‘aid’ within the meaning of Article 107(1) TFEU or, if classified as aid, is compatible with the FEU Treaty, or where that procedure has not enabled it to overcome the serious difficulties involved in assessing the compatibility of the measure under consideration, the Commission is under a duty to initiate the procedure provided for in Article 108(2) TFEU, and has no discretion in that regard (see, to that effect, judgment of 10 May 2005, Italy v Commission, C‑400/99, EU:C:2005:275, paragraph 47). That duty is, moreover, expressly confirmed by the provisions of Article 4(4) in conjunction with Article 15(1) of Regulation 2015/1589 (see, by analogy, judgment of 22 December 2008, British Aggregates v Commission (C‑487/06 P, EU:C:2008:757, paragraph 113).

34      Article 4(3) and (4) of Regulation 2015/1589 states in that regard that, in so far as the measure notified by the Member State concerned falls within the scope of Article 107(1) TFEU, it is the presence or absence of ‘doubts’ as to the compatibility of that measure with the internal market that is determinative for the Commission’s decision not to raise objections or, on the contrary, to initiate the formal investigation procedure, following its preliminary examination.

35      The concept of ‘doubts’ set out in Article 4(3) and (4) of Regulation 2015/1589, which takes the form of the existence of serious difficulties encountered by the Commission in its examination of whether the measure at issue constitutes aid or whether it is compatible with the internal market, is objective in nature. Whether or not such doubts exist requires investigation of both the circumstances under which the contested measure was adopted and its content. That investigation must be conducted objectively, comparing the grounds of the decision with the information available to the Commission when it decided on the compatibility of the aid at issue with the internal market. It follows that judicial review by the General Court of the existence of doubts will, by nature, go beyond consideration of whether or not there has been a manifest error of assessment (see, to that effect, judgments of 2 April 2009, Bouygues and Bouygues Télécom v Commission, C‑431/07 P, EU:C:2009:223, paragraph 63, and of 10 July 2012, Smurfit Kappa Group v Commission, T‑304/08, EU:T:2012:351, paragraph 80 and the case-law cited).

36      The onus is on the applicant to prove the existence of doubts, proof that can take the form of a consistent body of evidence (see, to that effect, judgment of 19 September 2018, HH Ferries and Others v Commission, T‑68/15, EU:T:2018:563, paragraph 63 and the case-law cited).

37      It is in the light of that case-law that the Court must examine the items of evidence adduced by the applicant that seek to establish the existence of doubts which should have led the Commission to initiate the formal investigation procedure.

 The first item of evidence, to the effect that the measure at issue does not fall within the scope of the R&R Guidelines

38      The applicant submits, in essence, that Condor was not eligible for restructuring aid under point 22 of the R&R Guidelines.

39      The Commission, supported by the Federal Republic of Germany and Condor, disputes the applicant’s arguments.

40      Point 22 of the R&R Guidelines states:

‘A company belonging to or being taken over by a larger business group is not normally eligible for aid under these guidelines, except where it can be demonstrated that the company’s difficulties are intrinsic and are not the result of an arbitrary allocation of costs within the group, and that the difficulties are too serious to be dealt with by the group itself. …’

41      In the present case, the Commission considered in paragraphs 106 and 107 of the contested decision that the conditions set out in point 22 of the R&R Guidelines were met on the ground, first, that when the decision was adopted Condor was not part of a larger business group. Condor’s sole shareholder at that time, SG Luftfahrt GmbH (‘SGL’), was merely a trust company created solely to hold Condor’s shares pending their sale to an investor, while SGL did not hold shares in other undertakings and was deprived by contract of most of the usual rights of a shareholder. It followed, according to the Commission, that Noerr & Stiefenhofer, the ultimate parent of SGL and Condor, could not exercise meaningful rights over Condor through SGL, such that Condor could likewise not be considered as forming part of the Noerr & Stiefenhofer group. Condor’s difficulties thus did not result from an arbitrary allocation of costs within a hypothetical wider group. Second, the Commission found that Condor’s former parent company, Thomas Cook, was insolvent and being wound up, such that it could not resolve Condor’s difficulties either. In addition, Condor’s difficulties were not the result of an arbitrary allocation of costs within Thomas Cook.

42      The applicant does not dispute the fact that at the time the contested decision was adopted, Condor was not part of a group consisting of SGL or Noerr & Stiefenhofer, nor the fact that, at that time, since all of the shares in Condor had been transferred to SGL, Condor was no longer part of Thomas Cook.

43      On the other hand, the applicant complains that the Commission failed to examine whether Attestor Ltd, an investment fund, which was in the process of acquiring Condor when the contested decision was adopted – with a notarial act relating to such a planned purchase having been drawn up on 20 May 2021, that is to say almost two months before the adoption of the contested decision – constituted a larger business group, and whether Condor was therefore being ‘taken over’ by such a group, for the purposes of point 22 of the R&R Guidelines.

44      In that regard, it is apparent from paragraphs 35, 74, 76 and 126 of the contested decision, this not being disputed by the applicant, that, as stated by the Commission, Attestor’s purchase of Condor was conditional on the grant of the measure at issue and was thus de facto suspended until approval of that measure. The applicant has, moreover, failed to offer any evidence or indication capable of demonstrating that, without the measure at issue, Attestor would have purchased Condor in any event.

45      In those circumstances, the partial write-off of Condor’s debt to the German State, which is the subject matter of the measure at issue, should be analysed, in essence, as being a negative factor incorporated in the price to be paid by Attestor for the acquisition of Condor, with that price necessarily reflecting the amount of Condor’s debt written off following the adoption of the measure at issue and which will therefore no longer have to be repaid.

46      The Court has already had occasion to hold in similar circumstances that, in principle, where a business group is willing to purchase a company only on condition that that company receives State aid in order to improve its financial situation, with the result that that aid could be analysed as being a negative factor incorporated in the price paid by the group for the acquisition of that undertaking, that undertaking cannot be regarded as being in the process of being taken over by that group, for the purposes of point 22 of the R&R Guidelines (see, to that effect, judgment of 13 May 2015, Niki Luftfahrt v Commission, T‑511/09, EU:T:2015:284, paragraphs 130, 158 and 161 to 163).

47      One of the principles laid down in point 22 of the R&R Guidelines is that an undertaking in difficulty which belongs to a group is prohibited from benefiting from restructuring aid where its difficulties are not intrinsic and are the result of an arbitrary distribution of costs within the group or where the group has the means to resolve those difficulties on its own. The objective of that prohibition is therefore to prevent a group of undertakings from having the State bear the cost of a plan for the restructuring of one of the undertakings belonging to the group, when that undertaking is in difficulty and the group itself has created those difficulties or has the means to deal with them on its own (see, by analogy, judgment of 13 May 2015, Niki Luftfahrt v Commission, T‑511/09, EU:T:2015:284, paragraph 159).

48      In that context, the purpose of extending the prohibition of the benefit of restructuring aid to undertakings in difficulties which are in the process of being ‘taken over’ by a group is to prevent a group of undertakings from circumventing that prohibition by taking advantage of the fact that an undertaking which it is in the process of buying does not yet formally belong to it at the time of payment of the restructuring aid in favour of the undertaking being purchased (judgment of 13 May 2015, Niki Luftfahrt v Commission, T‑511/09, EU:T:2015:284, paragraph 160).

49      However, such a situation cannot be assimilated to that of the present case, where the acquisition of Condor by Attestor is conditional upon the grant of the measure at issue, with the result that that measure constitutes, in essence, a negative element forming part of the price to be paid by Attestor for the acquisition of Condor (see, to that effect, judgment of 13 May 2015, Niki Luftfahrt v Commission, T‑511/09, EU:T:2015:284, paragraph 161).

50      Any interpretation to the contrary would result in finding that an undertaking in difficulty is not eligible for restructuring aid owing to the resources that are available to a business group planning to purchase it, even though, in the absence of the aid, it would not be taken over by that group and would have not have any access to its resources.

51      The argument put forward by the applicant in order to call into question the relevance of the judgment of 13 May 2015, Niki Luftfahrt v Commission (T‑511/09, EU:T:2015:284), on the ground that, in the case which gave rise to that judgment, the purchase price corresponded to the market price, unlike the present case, must be rejected. It is sufficient to observe that Attestor’s offer was accepted after a bidding process and that the applicant has not put forward any evidence or indication capable of showing that the price resulting from that process did not correspond to the market price.

52      Accordingly, it must be found that the applicant has not shown that the Commission should have had doubts as to whether the beneficiary belonged to or was being taken over by a larger business group, within the meaning of point 22 of the R&R Guidelines.

53      The Commission was therefore entitled to find, without entertaining any doubts, that Condor’s situation did not fall within the scope of the prohibition under point 22 of the R&R Guidelines.

54      Consequently, it must be concluded, without there being any need to examine the applicant’s arguments relating to the conditions set out in point 22 of the R&R Guidelines which enable that prohibition to be lifted, that it has not shown that the Commission should have had doubts as to Condor’s eligibility for the aid.

 The second item of evidence, relating to the contribution of the measure at issue to an objective of common interest

55      The applicant submits in essence that the Commission infringed point 44 of the R&R Guidelines in that it failed to demonstrate that the measure at issue contributed to an objective of common interest. In particular, it submits, first, that the service provided by Condor cannot be classified as ‘important’ and, second, that it was not a service that was ‘hard to replicate’ or one where it would be ‘difficult for any competitor simply to step in’, within the meaning of point 44(b) of the R&R Guidelines.

56      The Commission, supported by the Federal Republic of Germany and Condor, disputes the applicant’s arguments.

57      It is apparent from point 43 of the R&R Guidelines that, in order to be declared compatible with the internal market, a State aid measure must pursue an objective of common interest. According to that same point, that requirement takes the form of the condition that such a measure must be one that ‘aims to prevent social hardship or address market failure’. Point 44 of those guidelines states that Member States must demonstrate that the failure of the beneficiary would be likely to involve serious social hardship or severe market failure. The wording of that requirement is thus related to the condition laid down in Article 107(3)(c) TFEU, according to which the aid measure must be intended to facilitate the development of certain economic activities or of certain economic areas (judgment of 18 May 2022, Ryanair v Commission (Condor; rescue aid), T‑577/20, EU:T:2022:301, paragraph 68).

58      In order to comply with that requirement, Member States may show, in particular, in accordance with point 44(b) of the R&R Guidelines, that ‘there is a risk of disruption to an important service which is hard to replicate and where it would be difficult for any competitor simply to step in (for example, a national infrastructure provider)’.

59      In the present case, the Commission found in paragraphs 92 to 102 of the contested decision that the measure at issue complied with the conditions set out in point 44(b) of the R&R Guidelines.

60      In the first place, the applicant submits that the service provided by Condor cannot be classified as ‘important’, within the meaning of point 44(b) of the R&R Guidelines, on the ground, in essence, of its being a charter and leisure air transport service.

61      In that regard, it should be observed that the R&R Guidelines do not provide any definition of the concept of ‘important service’. Nevertheless, it is apparent from an overall interpretation of point 44 of the guidelines that, in order for a service to be regarded as ‘important’ within the meaning of point 44(b) of the R&R Guidelines, there is no requirement for the undertaking that provides that service to play an important systemic role in a particular region or sector, or that it be entrusted with a service of general economic interest (SGEI), those two latter situations being covered respectively by point 44(c) and (d) of the guidelines (see, to that effect, judgment of 18 May 2022, Ryanair v Commission (Condor; rescue aid), T‑577/20, EU:T:2022:301, paragraphs 74 and 75).

62      Furthermore, the mere fact that point 44(b) of the R&R Guidelines refers ‘for example’ to ‘a national infrastructure provider’ does not in any way mean that the scope of that point is limited to services that are of importance at the national level (judgment of 18 May 2022, Ryanair v Commission (Condor; rescue aid), T‑577/20, EU:T:2022:301, paragraph 76).

63      Similarly, a service may be regarded as ‘important’ within the meaning of point 44(b) of the R&R Guidelines even if the size of the relevant market is relatively small (see judgment of 29 March 2023, Wizz Air Hungary v Commission (Blue Air; COVID-19 and rescue aid), T‑142/21, EU:T:2023:164, paragraph 79 and the case-law cited).

64      In the contested decision, the Commission found that Condor played an important role as a facilitator and ‘consolidator’ on the German leisure travel market, owing, in essence, to the specific features of its services, provided to approximately 11 000 independent tour operators and travel agencies, many of which were small and medium-sized enterprises (SMEs). In particular, according to the contested decision, Condor bundled demand from small tour operators for flights to niche destinations, including to a large number of long-haul destinations, and offered them short-term flight plan flexibility, with its proprietary booking system enabling them, inter alia, to adapt to changes in demand. Consequently, according to the contested decision, Condor provided access to leisure flights to several thousand travel agencies that did not own a licence from the International Air Transport Association (IATA), through various interfaces that other airlines did not offer; in the absence of those interfaces, those agencies would have had to incur additional fees.

65      In addition, according to the Commission, Condor has gained considerable expertise in opening and developing tourist destinations, and has built technical capacities with regard to consolidating demand and flexible bookings and flight schedules by means of proprietary, customised IT programmes and processes that it had developed in-house. In that regard, the Commission noted that in the administrative procedure leading to the adoption of the decision on rescue aid, several tour operators had stated that they depended on Condor’s services for part of their business and that they would suffer considerable losses without those services.

66      It follows from those elements that the Commission was entitled to take the view that the service provided by Condor was an ‘important service’ within the meaning of point 44(b) of the R&R Guidelines.

67      First, the applicant argues that the charter airline industry has been in decline and that that has not led, however, to a shortage of capacity or harm to consumers, showing that the service provided by charter airlines could not be regarded as important. However, that circumstance, even if it were established, is general in nature and does not concern the specific services provided by Condor. Accordingly, it does not call into question the fact that Condor provided an important service to approximately 11 000 independent tour operators and travel agencies.

68      According to the applicant, the poor performance of the charter airline industry was probably the reason why the Commission, in Table 8 of the contested decision, in order to assess Condor’s return to viability, compared its performance with that of several airlines offering scheduled rather than charter flights, despite the fact that Condor is a charter airline. However, the applicant’s argument is irrelevant since the data presented in that table were aimed at comparing the performance of airlines prior to the COVID-19 pandemic in order to assess Condor’s return to viability, and not at determining whether the service provided by Condor was an ‘important service’ within the meaning of point 44(b) of the R&R Guidelines.

69      Second, the applicant submits that the service provided by Condor is not ‘important’ because it was only in thirteenth place in ‘air connectivity in Germany’ in December 2021, with a market share of 1.43%. However, even if those data were correct, it should be observed that the Commission did not conclude in the contested decision that Condor provided an important service for the connectivity of Germany in general, but only that it played an important role in a niche market, namely that of leisure air transport, in particular as regards services provided to independent tour operators and travel agencies. Moreover, that information relates to a period that had been seriously affected by the adverse effects of the COVID-19 pandemic, especially as regards the leisure travel sector, virtually eliminated by the pandemic, and which could largely explain the data presented by the applicant. By contrast, as the applicant acknowledges, Condor was the fourth-largest airline in Germany in 2019, that is, before the outbreak of the pandemic.

70      Third, contrary to what is claimed by the applicant in the reply, the fact that there exists a wide range of channels for booking airline tickets does not detract from the specific features of Condor’s IT system, as described in the contested decision. The applicant has not shown that those booking channels offered functions and advantages to independent tour operators and travel agencies that were comparable to those provided by Condor’s IT system. In particular, it has not shown that those booking channels, like Condor’s IT system, allows thousands of independent tour operators and travel agencies to access charter reservations simultaneously and to adapt to changes in demand by taking advantage of the short-term flight plan flexibility offered by Condor.

71      Fourth, the applicant challenges the probative value of the letters from tour operators referred to in paragraph 95 of the contested decision, in which they stated that they depended on Condor’s services for part of their business and would suffer considerable losses without them. It states that the wording and structure of those letters is very similar, if not identical, which, according to the applicant, shows that the production of those letters was coordinated by Condor.

72      In that regard, it should be observed that, in accordance with settled case-law, the activity of the Court of Justice and of the General Court is governed by the principle of the unfettered assessment of the evidence, and it is only the reliability of the evidence before the Court which is decisive when it comes to the assessment of its value. In order to assess the probative value of a document, regard should be had to the credibility of the account it contains, taking account in particular of the person from whom the document originates, the circumstances in which it came into being, the person to whom it was addressed and whether, on its face, the document appears to be sound and reliable (see judgment of 5 May 2021, ITD and Danske Fragtmænd v Commission, T‑561/18, EU:T:2021:240, paragraph 120 and the case-law cited).

73      It is apparent from those letters, certain of which were added to the file, inter alia, that tour operators were concerned about Condor’s difficulties, that Condor was an important airline for tour operators active on the German market and that its exit from the market would have negative effects on them. Since those letters originate from economic operators unrelated to Condor and since their content is consistent, sound and reliable, there is no call to raise a question about their probative value.

74      Similarly, the fact that a statement has been made at the request of one party and that that party may have coordinated its drafting does not, in itself, undermine its content and probative value, given that, in the absence of evidence to the contrary, it must be assumed that the signatory of the statement signed it voluntarily and takes responsibility for the content thereof (see, to that effect, judgment of 19 October 2022, Louis Vuitton Malletier v EUIPO – Wisniewski (Representation of a chequerboard pattern II), T‑275/21, not published, EU:T:2022:654, paragraph 106 and the case-law cited).

75      Moreover, the Commission stated in the contested decision that Condor’s exit from the market would have negative effects on its network of approximately 5 000 to 6 000 suppliers and on its staff of approximately 4 000. Contrary to what the applicant claims, those grounds as given in the contested decision examine Condor’s specific situation in the specific economic context of the sector concerned and are therefore not too general in nature.

76      In the light of the foregoing considerations, it must be held that the applicant has failed to show that the Commission should have had doubts as to whether the service provided by Condor was an ‘important service’ within the meaning of point 44(b) of the R&R Guidelines.

77      In the second place, the applicant submits that the service provided by Condor is neither a service ‘which is hard to replicate’ or one ‘where it would be difficult for any competitor simply to step in’, within the meaning of point 44(b) of the R&R Guidelines.

78      In that regard, it should be borne in mind that, in accordance with point 44(b) of the R&R Guidelines, Member States must show that there is a ‘risk’ of disruption to an important service which is ‘hard’ to replicate and where it would be ‘difficult’ for any competitor simply to step in.

79      It follows that the Member State concerned is not required to demonstrate that, in the absence of the aid measure, certain negative consequences would necessarily arise as a result of the aid beneficiary’s failure, but only that such consequences might arise (judgment of 4 May 2022, Wizz Air Hungary v Commission (TAROM; Rescue aid), T‑718/20, EU:T:2022:276, paragraph 40). There is thus no requirement for the Member State to demonstrate that, following the hypothetical failure of an aid recipient, it would be impossible for its competitors to replicate and ensure the service provided by it, but only that it would be complicated or difficult to do so.

80      The Commission found in the contested decision that it was highly unlikely that Condor’s competitors would be both willing and able to build the required expertise, networks and technology within a reasonable time frame to take on Condor’s role as facilitator and ‘consolidator’ for around 11 000 independent tour operators and travel agencies on the German leisure travel market. It stated that in order to replicate Condor’s services, competitors would have to build up the required expertise, network of destinations and contact points, as well as IT systems and processes, which would take a considerable amount of time.

81      The Commission added that the technology needed to operate the interfaces provided by Condor to its clients had largely been developed by that company and could not be replicated in the short to medium term, and that Condor’s exit from the market would cause the loss of technical knowledge and expertise, which would take time and investment to rebuild. In addition, it stated that it was highly unlikely that competitors could replicate Condor’s services on its long-haul leisure flights and thus achieve a sufficient plane load factor to operate them profitably, and that, even if some of Condor’s individual routes might be attractive to a particular competitor, there was nothing to indicate that such a competitor would be willing to develop a system of cooperation with tour operators and travel agencies or take over all of Condor’s services.

82      The applicant submits, first, that other airlines could have replicated a significant portion of Condor’s services if the latter had failed. That is shown by the fact that other airlines aggregate demand from tour operators and travel agencies to organise charter flights, that many of Condor’s routes overlapped with those of Lufthansa and that TUIfly competes as a charter airline with Condor on several routes from Germany.

83      However, the mere fact that another airline operates on part of the routes served by Condor or that it aggregates demand from tour operators and travel agencies is not capable of establishing that a competitor would easily replicate Condor’s service in the event of the latter’s failure. In finding that the conditions of point 44(b) of the R&R Guidelines had been met, the Commission relied on a combination of factors which differentiated the services provided by Condor from those of other airlines and which meant that they were difficult and complicated to replicate in the short and medium term, namely, in particular, schedules and flight plans that were flexible in the short-term, proprietary and customised booking systems developed in-house that allow tour operators and travel agencies to access flights through various interfaces, considerable expertise and technical knowledge, a wide network of destinations and contact points, including a great number of niche destinations and long-haul flights from Germany, with the fleet and slots belonging to Condor.

84      As regards, in particular, the possibility raised by the applicant that TUIfly could take over the services provided by Condor in the event of the latter’s failure, it is sufficient to note, as the Commission has done, and as is apparent from footnote 12 to the contested decision, that, unlike Condor, which provided services to independent tour operators and travel agencies, TUIfly only served tour operators that are part of the TUI Group. The applicant has not submitted any evidence or indication capable of demonstrating that if Condor had to exit the market, TUIfly would be willing also to provide its services to independent tour operators and travel agencies.

85      Second, the applicant submits in essence that the Commission should also have assessed whether airlines established outside Germany, such as Jet2 or LOT, or several airlines at the same time, were able to replicate and ensure the service provided by Condor. However, for the same reasons as those set out in paragraphs 83 and 84 above, that argument cannot succeed.

86      Third, the applicant refers to several examples of airlines becoming insolvent, which, in its view, had no impact on air transport services since their operations had been taken over by other airlines. In this instance too the applicant merely makes general assertions, without showing that the services provided by those airlines were comparable to those of Condor and that those services could therefore have been easily replicated in the event of Condor’s failure.

87      Fourth, the applicant submits that if Condor had been put into liquidation, its assets, such as its technology, could have been purchased by other airlines. However, the possible acquisition of a particular asset at the time of a possible liquidation of Condor does not in any way guarantee that it would be easy to replicate all the aspects of the services provided by Condor in the short or medium term.

88      Fifth, the applicant criticises the Commission for having assessed whether it was hard to replicate the service provided by the recipient in the short or medium term. According to the applicant, where restructuring aid is involved, as in the present case, that issue should be analysed on a long-term basis, in contrast to rescue aid, which relates to the short term.

89      That argument must be rejected since it is based on an erroneous premiss. While it is indeed true that there is a difference in terms of the timescale between rescue aid, whose duration is limited to six months, and restructuring aid, which stretches over a longer period, that difference is irrelevant for the purpose of applying point 44(b) of the R&R Guidelines. The assessment of whether it is hard to replicate a service and whether it would be ‘difficult’ for any competitor simply to step in, the Commission must take account of the characteristics of the market at issue and not the period of application of the aid at issue. In the present case, with a market that is essentially seasonal, such as the leisure travel market, and a customer base consisting mainly of independent tour operators and travel agencies, including SMEs, which would not have withstood long disruptions to the market, especially since they had themselves already been seriously impacted by the COVID-19 pandemic, the Commission was entitled to perform its analysis on a short- and medium-term basis.

90      Sixth, the applicant submits that the Commission, when finding that it was unlikely that Condor’s competitors could replicate its services in the short or medium term, disregarded the sharp decline in demand, in 2022 compared with 2019, for long-haul tourist flights due to the COVID-19 pandemic. As a result, according to the applicant, demand from tour operators and travel agencies is much lower, meaning that Condor’s competitors have more time to take over its services.

91      It is apparent from paragraph 43 of the contested decision that, when that decision was adopted, the key performance indicators for the air transport sector in general, including in particular the forecast number of passengers, were expected to reach their 2019 levels in around 2023 or 2024, with the recovery in tourist flights, such as those provided by Condor, being even faster. In addition, it should be observed that for the reasons set out in paragraph 89 above, the Commission was entitled to perform a short- and medium-term analysis of whether it was possible to replicate and ensure the services provided by Condor.

92      In the light of the foregoing considerations, it must be concluded that the applicant has not demonstrated that the Commission should have had doubts as to whether, in the event of the failure of the recipient, it would be hard to replicate its service and difficult for any competitor simply to step in, for the purposes of point 44(b) of the R&R Guidelines.

93      Consequently, the second item of evidence, relating to the contribution of the measure at issue to an objective of common interest, must be rejected in its entirety.

 The third item of evidence, to the effect that the Commission has not established the need for State intervention and its incentive effect

94      The applicant argues in essence that the Commission has not shown that the measure at issue was necessary and had an incentive effect, disregarding points 8, 53 and 59 of the R&R Guidelines and point 3 of the second paragraph of Annex II thereto.

95      The Commission, supported by the Federal Republic of Germany and Condor, disputes the applicant’s arguments.

96      According to the case-law, in order for aid to benefit from one of the derogations contained in Article 107(3) TFEU, it must not only comply with one of the objectives set out in Article 107(3) (a), (b), (c) or (d) TFEU, but it must also be necessary for the attainment of those objectives. That aid must in fact induce the beneficiary to adopt conduct likely to assist attainment of those objectives (see judgment of 13 December 2017, Greece v Commission, T‑314/15, not published, EU:T:2017:903, paragraph 180 and the case-law cited). Accordingly, in the context of Article 107(3)(c) TFEU, in order to be compatible with the internal market, the planned aid must have an incentive effect and thus be necessary to ‘facilitate the development of certain economic activities or of certain economic areas’ (see judgment of 13 December 2017, Greece v Commission, T‑314/15, not published, EU:T:2017:903, paragraph 182 and the case-law cited).

97      By contrast, aid which improves the financial situation of the recipient undertaking, without being necessary for the attainment of the objectives specified in Article 107(3) TFEU, cannot be considered compatible with the internal market. In that regard, it has been held that a finding that an aid measure is not necessary could arise in particular from the fact that the aid project had already been started, or even completed, by the undertaking concerned prior to the application for aid being submitted to the competent authorities. In such a case, the aid concerned could not operate as an incentive (see judgment of 13 December 2017, Greece v Commission, T‑314/15, not published, EU:T:2017:903, paragraph 181 and the case-law cited).

98      According to point 8 of the R&R Guidelines, undertakings should only be eligible for restructuring aid when they have exhausted all market options and where such aid is necessary in order to achieve a well-defined objective of common interest. In addition, it is apparent from point 53 of those guidelines, and from point 3 of the second paragraph of Annex II thereto, that the Member State concerned must provide a comparison with a credible alternative scenario not involving State aid, demonstrating how the objective pursued by the aid would not be attained, or would be attained to a lesser degree, in the case of that alternative scenario; such a scenario may, for example, include debt reorganisation, asset disposal, private capital raising, sale to a competitor or break-up, in each case either through entry into an insolvency or reorganisation procedure or otherwise. Lastly, under point 59 of the R&R Guidelines, Member States that intend to grant restructuring aid must demonstrate that in the absence of the aid, the beneficiary would have been restructured, sold or wound up in a way that would not have achieved the objective intended by the aid, while that demonstration can form part of the analysis presented in accordance with point 53 of the R&R Guidelines.

99      In the present case, in the first place, the applicant complains that the Commission failed to examine whether the objective of the measure at issue could be achieved in a credible alternative scenario which did not involve any State aid, contrary to points 53 and 59 of the R&R Guidelines and point 3 of the second paragraph of Annex II thereto.

100    The Commission found in essence in the contested decision that the only credible scenario in the absence of the measure at issue was that of Condor’s liquidation and that, in such a scenario, the objectives of the measure at issue could not be attained or could, at the very least, be attained only to a lesser degree. In that regard, the Commission referred in paragraph 66 of the contested decision to the assessment of the German authorities that, in the absence of the measure at issue, the agreement for Attestor’s purchase of Condor would not have been signed, Condor would soon have suffered a shortage of liquidity and its operating licence would have been suspended and then withdrawn; that would have led to its liquidation and the non-repayment of the COVID-19 loans of 2020, to the loss of more than 4 000 jobs and to a reduction in competition on the German leisure travel market. In paragraph 33 of the contested decision, the Commission observed that, in the context of Condor’s insolvency proceedings, which had been opened by the insolvency court on 1 December 2019 and then closed on 30 November 2020, Condor’s creditors’ committee had had the possibility to choose between Condor’s liquidation or a partial write-off of its debts, with the majority of creditors choosing the second option. Lastly, in Section 3.3.1 of the contested decision, in particular in paragraphs 98, 100 and 101, the Commission explained in essence that if Condor had been liquidated and had exited the market, the objectives of the measure at issue – which consisted essentially of contributing to the development of the economic activity of leisure air travel by preventing a severe market failure – could not have been attained.

101    It is apparent from point 53 of the R&R Guidelines that one of the credible scenarios not involving State aid that Member States may provide as a comparison is precisely that of the ‘break-up’ of the beneficiary ‘through entry into an insolvency … procedure’. Point 59 of those guidelines refers in turn to the alternative scenario of the beneficiary being wound up.

102    Since the Commission based its analysis on just such an alternative scenario, as is apparent from paragraph 100 above, the applicant’s argument must be rejected.

103    The applicant submits in addition that the assertion in paragraph 66 of the contested decision, to the effect that in the absence of the measure at issue the COVID-19 loans of 2020 would not be repaid, ignores the collateral provided to ensure repayment of those loans. However, the applicant has not identified the collateral in question but has merely referred to the decision on rescue aid, which mentions collateral provided by Condor in connection with a different loan. In any event, the fact, even if it were established, that the COVID-19 loans of 2020 could have been repaid by means of that collateral in an alternative scenario involving the liquidation of Condor does not mean that the objective of the measure at issue, consisting in essence of contributing to the development of the economic activity of leisure air travel by preventing a severe market failure, would have been attained. Regardless of such repayment taking place, that alternative scenario would have led to the failure of the purchase of Condor by a new investor, the probable suspension and even subsequent withdrawal of Condor’s operating licence, the endangering of more than 4 000 jobs and a reduction in competition on the German leisure travel market.

104    The applicant also criticises the assertion in paragraphs 66 and 100 of the contested decision that, in the absence of the measure at issue, more than 4 000 jobs would be jeopardised; it maintains that many jobs in the sector would in any event be lost during the COVID-19 pandemic and that if Condor had been liquidated its competitors would have hired at least some of its former employees. However, the applicant’s arguments attest themselves to the fragile position of air transport sector employees during the COVID-19 pandemic and do not in any way detract from the relevance of the Commission’s assessment regarding the adverse social effects of the possible failure of Condor. In any event, the prospect of Condor’s employees being taken on by other carriers, in the alternative scenario of Condor’s liquidation, appears speculative in the context of a market that was seriously impacted by the pandemic, which, by the applicant’s own admission, caused the loss of many jobs in the sector.

105    Lastly, the applicant complains in the reply that the Commission, in Section 3.3.1 of the contested decision, examined the existence of social hardship or market failure together with the incentive nature of the measure at issue, whereas those are two separate conditions under the R&R Guidelines, namely, on the one hand, that concerning the contribution of the measure at issue to an objective of common interest, referred to in points 43 to 52 of the guidelines, and, on the other, that of the incentive effect of the measure, under point 59 of the guidelines.

106    However, the mere fact that, formally speaking, those conditions were examined together in the same section of the contested decision is not such as to show that the Commission merged them together.

107    In the second place, the applicant complains that the Commission, disregarding point 8 of the R&R Guidelines, failed to demonstrate that, in the absence of State aid, Condor could not access alternative sources of financing on the market, for example by obtaining loans, in order to finance at least part of its liquidity needs.

108    In that regard, it should be observed that Condor was in a unique economic and financial situation when the contested decision was adopted owing, inter alia, to the fact that it had belonged to Thomas Cook until the latter became insolvent in September 2019 and because of the financing arrangements it had utilised when it was part of Thomas Cook.

109    As is apparent from paragraphs 19 and 107 of the contested decision, and from the judgment of 18 May 2022, Ryanair v Commission (Condor; rescue aid) (T‑577/20, EU:T:2022:301, paragraphs 51 and 52), Condor, when it was part of Thomas Cook, participated in that group’s cash-pooling system, which allowed the various group companies, including Condor, to obtain intra-group loans, in the event of liquidity needs, and to deposit funds with that cash pool, in the event of surplus liquidity, in return for a receivable in respect of that cash, together with interest. That system thus enabled Condor to obtain intra-group liquidity when it needed it, instead of having to obtain financing on the capital markets. Consequently, it did not have a risk profile of its own.

110    As shown by paragraphs 19 and 107 of and footnote 17 to the contested decision, the insolvency of Thomas Cook had adverse effects on Condor for several reasons. First of all, when the insolvency occurred, Condor had significant receivables against the group’s cash pool, which were no longer enforceable and which it had to write off. Next, Condor could no longer obtain intra-group financing following that insolvency. Lastly, Condor was jointly liable for certain of Thomas Cook’s debts. Consequently, the insolvency court opened insolvency proceedings with respect to Condor. In those circumstances, and in the absence of an independent own risk profile, the Commission was entitled to consider, without having doubts, that Condor could not easily obtain financing on the capital markets.

111    The applicant’s arguments do not call the above considerations into question.

112    First, the applicant submits that Condor could have obtained financing on the market without State aid, particularly in view of the fact that it had benefited from the COVID-19 aid of 2020 and was an intrinsically viable undertaking.

113    However, it should be observed that the COVID-19 aid of 2020 was intended to make good part of the damage suffered by Condor as a result of the imposition of travel restrictions linked to the COVID-19 pandemic, under Article 107(2)(b) TFEU, and not to provide it with the liquidity needed to deal with its pre-existing financial difficulties connected with Thomas Cook’s insolvency. It follows that the fact that Condor had received the COVID-19 aid of 2020 is not capable of demonstrating that it could have obtained additional financing on the financial markets thanks to that aid.

114    In addition, it is indeed true that, according to the contested decision, Condor was an intrinsically viable undertaking. However, given the specific circumstances referred to in paragraphs 108 to 110 above, arising, moreover, in a context marked by the COVID-19 pandemic, which had had an impact in particular on the airline sector, the fact that Condor was an intrinsically viable undertaking is likewise not sufficient to establish that it could have obtained funding on the financial markets.

115    Second, contrary to what is claimed by the applicant, the assertion in paragraph 107 of the contested decision, that Condor did not have its own bank financing and was unable to finance its liquidity needs on the market because it had always received intra-group financing is not an over-broad statement; on the contrary, it relates specifically to Condor’s economic and financial situation. In addition, while the applicant submits that Condor could have provided collateral in exchange for financing, its argument is not substantiated in any way. In particular, the applicant does not put forward any evidence capable of demonstrating that Condor could have offered such collateral and that, thanks to that collateral, it could have obtained a not-insignificant part of its financing needs on the financial markets.

116    Likewise, contrary to what the applicant claims, there is no contradiction between the statement in footnote 17 to the contested decision, that Condor could not raise funds on the capital markets because it did not have an independent own risk profile, and that of paragraph 20 of the contested decision, that the main element of Condor’s insolvency plan was the operational and financing unbundling of Condor from Thomas Cook. The first statement reflects the fact that following the insolvency of Thomas Cook, Condor did not have its own independent risk profile and, consequently, was unable to obtain financing on the market, while the second relates to the fact that once Condor had become insolvent a few months later it had implemented an insolvency plan aimed at its decoupling from Thomas Cook.

117    Third, the applicant makes the argument that several other airlines were able to obtain financing on the market without State aid, such as easyJet, American Airlines, Hawaiian Airlines, Azul Airlines and Gol Airlines. It also refers to a Commission decision which stated that during the COVID-19 pandemic certain airlines, in particular IAG, Finnair and Air France, had received simultaneous public and private investment. The applicant refers in the reply to several examples of airlines that had succeeded in raising funds on the markets despite the fact that they were insolvent, namely Delta Airlines in 2007, LATAM Airlines in 2020 and Norwegian Air in 2021.

118    It is sufficient to observe in that regard, as the Commission has done, that the applicant has failed to show that those airlines were in an economic and financial situation that was comparable to the very specific situation of Condor, as described in paragraphs 108 to 110 above, such that that argument cannot succeed.

119    It follows that the applicant has not established that the Commission should have entertained doubts as to whether Condor was able to access alternative sources of financing on the market without State aid.

120    In the light of the foregoing considerations, it must be concluded that the applicant has not demonstrated that the Commission should have had doubts as to the need for State intervention and its incentive effect.

 The fourth item of evidence, to the effect that the Commission failed to establish that the restructuring plan was realistic, coherent, far-reaching and apt to restore Condor’s long-term viability

121    The applicant submits, in essence, that the Commission has not shown that the restructuring plan was realistic, coherent and far-reaching and capable of restoring Condor’s long-term viability, in disregard of points 45, 47, 48 and 50 to 52 of the R&R Guidelines and of point 9 of the second paragraph of Annex II thereto.

122    The Commission, supported by the Federal Republic of Germany and Condor, disputes the applicant’s arguments.

123    In accordance with points 45, 47, 48 and 50 to 52 of, and point 9 of the second paragraph of Annex II to, the R&R Guidelines, restructuring aid must tackle the reasons for the losses suffered by the beneficiary. To that end, the Member State concerned is to submit a feasible, coherent and far-reaching restructuring plan to restore the beneficiary’s long-term viability within a reasonable timescale. That plan must be based on realistic assumptions that exclude any further State aid, identify the causes of the beneficiary’s difficulties and outline how the proposed restructuring measures will remedy the beneficiary’s underlying problems. The beneficiary’s return to viability should derive mainly from internal measures, entailing in particular withdrawal from activities which would remain structurally loss-making in the medium term and should be demonstrated in a baseline and in a pessimistic scenario. An undertaking is considered to have achieved long-term viability when it is able to provide an appropriate projected return on capital after having covered all its costs.

124    In the contested decision, the Commission described Condor’s restructuring plan and explained the reasons why, in its view, it complied with the requirements of the R&R Guidelines set out above.

125    First, the Commission stated that that plan was based on three main components, namely cost and efficiency gains through rationalisation and renewal of the beneficiary’s fleet; financial and capital restructuring through private funding from Attestor and the renegotiation of the COVID-19 loans of 2020; and organisational stabilisation through the entry into Condor’s capital of a strategic partner. Second, in Section 2.4.1 of the contested decision, entitled ‘Operational and organisational restructuring’, the Commission noted in particular that under that plan Condor had launched a programme of rationalisation, commercial optimisation and productivity improvement in order to reduce operating costs and to maintain and further enhance its profitability, and it described the cost and productivity gains generated by that plan. Third, in Section 2.4.2 of the contested decision, entitled ‘Capital and financial restructuring and financing of restructuring plan’, it stated, in particular, that the restructuring costs would be financed partly by own resources and partly by public financing and it described those sources of financing. Fourth, in Section 2.4.3 of the contested decision, entitled ‘Operational and financial trajectory of restructuring and return to viability’, the Commission set out the main assumptions on which the restructuring plan was based and analysed Condor’s return to viability. Fifth, in Section 3.3.1.2 of the contested decision, entitled ‘Restructuring plan and return to long-term viability’, it explained the reasons why it considered that the plan was realistic, coherent and far-reaching and therefore apt to restore Condor’s long-term viability without relying on further State aid and within a reasonable period of time.

126    The applicant refers to five items of evidence in order to demonstrate that the Commission should have had doubts as to whether Condor’s restructuring plan was realistic, coherent, far-reaching and apt to restore its long-term viability.

–       Item of evidence alleging that the Commission failed to distinguish between compensation for the damage caused by the COVID-19 pandemic and the restructuring aid

127    The applicant submits that Condor did not require restructuring. In reality, according to the applicant, the Commission adopted the contested decision to allow Condor to retain the excess compensation which it had received under the COVID-19 aid decision of 2020 and which it no longer had to repay owing to the measure at issue. The Commission thus failed to distinguish between compensation for the damage caused by the COVID-19 pandemic and restructuring aid.

128    First, as regards the applicant’s argument that Condor did not require restructuring because it was an inherently viable undertaking, it is true that according to the contested decision Condor’s difficulties had been caused by the failure of Thomas Cook and were therefore not intrinsic to its business model. That does not mean, however, that it did not require restructuring. On the one hand, the applicant provides no explanation as to why the operational and organisational restructuring measures and the capital and financial restructuring measures, referred to in paragraph 125 above, were not necessary. On the other hand, neither the R&R Guidelines nor the case-law mean that an undertaking, which appears as such to be intrinsically viable but whose economic difficulties stem from the failure of its parent company, which has contaminated the financial situation of all the companies belonging to the group, is excluded from being able to receive restructuring aid.

129    In addition, the measures set out in the restructuring plan did indeed aim to deal with Condor’s difficulties caused by the insolvency of its parent company. As observed in paragraph 110 above, the failure of Thomas Cook led to the writing-off of Condor’s receivables against the group cash pool. Moreover, Condor became jointly liable for certain Thomas Cook debts as a result of that insolvency. Similarly, the fact that Condor had in the past obtained financing through Thomas Cook’s cash-pool system and did not have its own independent risk profile meant that Thomas Cook’s insolvency caused difficulties for Condor in obtaining funding elsewhere. As is apparent from paragraphs 25, 29 to 32 and 46 of the contested decision, the restructuring plan was intended to enable Condor to obtain the financing it needed, to gradually alleviate the adverse effects of Thomas Cook’s insolvency on its equity and to achieve structural independence.

130    It is also necessary to reject the applicant’s argument that the measure at issue merely constitutes additional liquidity support that allows Condor to deal with the COVID-19 pandemic. As is clear from the contested decision, the difficulties faced by Condor which the measure at issue is intended to resolve had their origins in Thomas Cook’s insolvency and thus predated the pandemic.

131    Second, contrary to what is argued by the applicant, the Commission, when it calculated the total amount of the measure at issue, distinguished clearly between compensation for the damage caused by the COVID-19 pandemic and the restructuring aid.

132    It is apparent from the contested decision that the total amount of the measure at issue was EUR 321.18 million, namely EUR 300.98 million corresponding to the first part of the measure at issue, consisting of the modification of the conditions of the COVID-19 loans of 2020 and the partial write-off of the debt resulting from those loans, and EUR 20.2 million as the second part of that measure and involving the write-off of debt matching the interest that Condor was required to repay following the amended COVID-19 aid decision of 2020. In turn, the amount under the first part of that measure was calculated by deducting from the total nominal amount of the COVID-19 loans of 2020, namely EUR 550 million, the sum of EUR 249.02 million, which corresponded to the total amount of damage suffered by Condor as a result of the imposition of travel restrictions linked to the COVID-19 pandemic during the periods covered by the amended COVID-19 aid decision of 2020 and by the COVID-19 aid decision of 2021.

133    It follows that, as is apparent from paragraph 131 of the contested decision, a share of the COVID-19 loans of 2020 served to cover the exceptional costs incurred by Condor in the COVID-19 pandemic, and which therefore do not constitute restructuring costs included in the restructuring plan, while the remaining portion of those loans funded the restructuring, with the addition of the sum corresponding to the second part of the measure at issue.

134    Third, it is necessary to state the following as regards the applicant’s argument that the measure at issue was in fact provided in order to enable Condor to retain the excess compensation granted by the COVID-19 aid decision of 2020 and thus to avoid recovery of that sum.

135    In the amended COVID-19 aid decision of 2020, the Commission indeed found that Condor had received overcompensation under the COVID-19 aid decision of 2020 of EUR 91.745 million plus interest, which Condor was therefore obliged to repay. As for the measure at issue, it includes the partial write-off of Condor’s debts resulting from the COVID-19 loans of 2020, of EUR 90 million, and the write-off of the debt corresponding to the interest that Condor was required to repay for the advantage it had obtained as a result of that overcompensation.

136    However, the link between that overcompensation and the measure at issue, which is made apparent moreover in the contested decision itself, is not such as to show that the measure at issue pursues a different aim from that declared in the contested decision, namely to support the restructuring of Condor so as to prevent a severe market failure.

137    On the one hand, it should be borne in mind that, according to point 58 of the R&R Guidelines, Member States are free to choose the form that restructuring aid takes and that, as is apparent from point 65 of those guidelines, State support in the context of a restructuring may consist of a debt write-off. It is important to observe in that regard that the difficulties caused to Condor by the insolvency of Thomas Cook preceded the COVID-19 pandemic and were independent of it. It was those difficulties that justified the granting in October 2019 of State aid SA.55394 (2019/N) for the rescue of Condor. It was those same difficulties that led to the adoption of a restructuring plan, which Condor had begun to implement from October 2019 (paragraph 25 of the contested decision), that is to say, before the pandemic broke out. Accordingly, the pre-existing difficulties faced by Condor were subsequently just made worse by the travel restrictions imposed as a result of that pandemic. All of the COVID-19 loans of 2020 thus amounted to new debts that had been taken on by Condor in a context of pre-existing difficulties that had led to a restructuring plan whose implementation was already underway. Consequently, in the particular circumstances of the present case, the German State could legitimately decide to write off a portion of its claims as part of that restructuring plan.

138    On the other hand, assuming that the applicant’s argument should be understood as accusing the Commission of misusing its powers, it must be borne in mind that, according to the case-law, an act is vitiated by misuse of powers only if it appears, on the basis of objective, relevant and consistent evidence, to have been taken with the exclusive or main purpose of achieving an end other than that stated or evading a procedure specifically prescribed by the Treaty for dealing with the circumstances of the case (see judgment of 4 December 2013, Commission v Council, C‑121/10, EU:C:2013:784, paragraph 81 and the case-law cited). In the light of the particular circumstances of the case described in paragraph 137 above, it is not established that the contested decision is vitiated by a misuse of powers.

139    Fourth, the applicant refers to the press release issued by the Commission following the adoption of the contested decision and claims that it ‘adds to the confusion’ in that the amounts of the various aid measures received by Condor stated in the press release did not match those set out in the contested decision. However, the applicant makes no claim that the contested decision itself suffers from such inconsistencies. In those circumstances, a possible discrepancy between information in a press release and in the contested decision cannot constitute a ground for annulment of that decision.

140    Lastly, the applicant argued at the hearing that the Commission, in order to calculate the overall size of the restructuring aid, should not have deducted the total damage suffered by Condor as a result of the imposition of travel restrictions linked to the COVID-19 pandemic, namely EUR 249.02 million, from the total nominal amount of the COVID-19 loans of 2020, but rather the total aid granted to Condor under the amended decision on COVID-19 aid of 2020 and the decision on COVID-19 aid of 2021, namely EUR 204.1 million. Accordingly, in its view, approximately EUR 45 million was made available to Condor by the grant of the COVID-19 loans of 2020 with that amount not having been authorised under the contested decision, the decision on COVID-19 aid of 2020 or the decision on COVID-19 aid of 2021.

141    It should be observed, however, that that argument was raised for the first time at the hearing and that, contrary to what the applicant claims, it does not constitute an amplification of its argument referred to in paragraph 139 above. By that argument, the applicant referred only to purported contradictions between the press release and the contested decision, whereas, by its argument raised for the first time at the hearing, it maintained that a certain amount of aid had been made available to Condor without being approved by the Commission. Consequently, since the applicant has not presented any justification for the belated submission of that argument, it must be rejected as inadmissible (see, to that effect, judgments of 16 September 2020, BP v FRA, C‑669/19 P, not published, EU:C:2020:713, paragraph 15, and of 27 September 2012, Ballast Nedam Infra v Commission, T‑362/06, EU:T:2012:492, paragraph 137).

142    Consequently, the applicant has not shown that the Commission should have had doubts as to the distinction between compensation for the damage caused by the travel restrictions linked to the COVID-19 pandemic and the restructuring aid.

–       The item of evidence to the effect that Condor’s restructuring plan was not ‘far-reaching’

143    The applicant submits that Condor’s restructuring plan was not ‘far-reaching’ within the meaning of point 45 of the R&R Guidelines.

144    It is apparent from reading paragraphs 26, 28 and 112 of the contested decision together that the restructuring plan foresaw, inter alia, cost and productivity gains due to a reduction in staff; a decrease in staff costs by means of adjustments to collective agreements, management bonuses and salaries and certain additional payments; the relocation of offices to lower-cost sites; the renegotiation of supplier contracts; the adjustment of aircraft lease agreements; and the renewal of Condor’s ageing fleet. The Commission considered them to be a set of serious and consistent measures that were mutually reinforcing, improved the efficiency of Condor’s provision of services and streamlined its cost base, and considered that the renewal of Condor’s fleet, coupled with an ambitious staff, contract and process restructuring programme, would strengthen its competitiveness. In paragraph 124 of the contested decision, the Commission found that Condor’s restructuring plan was ‘far-reaching’.

145    First, the applicant submits that a lack of measures in the restructuring plan concerning a reduction in the fleet or the number of routes operated by Condor or other structural adjustments shows that the plan was not ‘far-reaching’.

146    In that regard, it should be observed that, in the absence of a legal definition of the concept of ‘far-reaching’ as it appears in the R&R Guidelines, that concept must be understood in its habitual meaning as referring not to the type of measures adopted within a restructuring plan, but to the extent and scope of such measures. That interpretation is apparent from a number of language versions of point 45 of the R&R Guidelines, including the versions in English (far-reaching), German (weitreichenden), Spanish (de amplio alcance), Bulgarian (mаshtаbеn), Hungarian (messze nyúló) and Dutch (ingrijpend). It follows that, as the Commission correctly maintains, a restructuring plan need not necessarily provide for a particular type of measure in order for such a plan to be regarded as ‘far-reaching’ within the meaning of the R&R Guidelines. Consequently, the mere fact that Condor’s restructuring plan does not foresee a reduction in the number of routes or ‘other structural adjustments’ does not permit the conclusion that it is not ‘far-reaching’.

147    Furthermore, as the Commission rightly observes, it is apparent in particular from recitals 145 and 148 of the contested decision that Condor’s restructuring plan already provided for, inter alia, a reduction in the size of its fleet and in its capacity in terms of aircraft and available seats, meaning that there is no factual basis to the applicant’s argument that the restructuring plan did not envisage that type of measure.

148    Second, it is necessary to reject the applicant’s argument that a comparison of Condor’s restructuring plan with those adopted in other cases which have recently been the subject of Commission decisions confirms that Condor’s plan was not ‘far-reaching’, inasmuch as the applicant has not submitted any evidence or indication that could show that the airlines concerned by those cases were in a comparable economic and financial situation to that of Condor.

149    Third, the applicant submits in the reply, in essence, that the Commission applied the requirements relating to restructuring aid, even though Condor did not need restructuring. However, that argument is based on a premiss that has already been rejected in paragraphs 128 to 130 above, to which reference is made.

150    Consequently, the applicant has failed to establish that the Commission should have had doubts as to whether Condor’s restructuring plan was ‘far-reaching’ within the meaning of point 45 of the R&R Guidelines.

–       The item of evidence referring to the fact that the Commission did not ascertain whether the measure at issue was limited to the minimum necessary

151    The applicant submits that the Commission failed to ascertain whether the restructuring aid for Condor was limited to the minimum necessary, as required by point 61 of the R&R Guidelines, which states that the amount and intensity of restructuring aid must be limited to the strict minimum necessary to enable restructuring to be undertaken, in the light of the existing financial resources of the beneficiary, its shareholders or the business group to which it belongs.

152    First, the applicant claims that the contested decision does not specify how the aid would be allocated between the various measures adopted within the restructuring plan. However, that fact alone is not sufficient, in the absence of other evidence, to show that the aid in question was not limited to the minimum necessary.

153    Second, the applicant disputes the necessity of the measure at issue and its incentive effect on the ground that Condor, when the contested decision was adopted, had already implemented some of the measures set out in the restructuring plan. In particular, referring to an article annexed to the application, it states that Condor had, in January 2020, that is to say, approximately one and a half years before the measure at issue was notified, concluded an agreement with its flight attendants to remove certain posts.

154    In that regard, it is sufficient to note, as the Commission explained at the hearing, without being challenged on that point by the applicant, that the costs associated with the removal of the posts referred to in that article were not covered by the restructuring aid granted to Condor. Accordingly, the fact that those staff reductions were carried out before the adoption of the contested decision could not have given rise to doubts on the part of the Commission as to whether the measure at issue was limited to the minimum necessary and had an incentive effect.

155    Third, the applicant submits that the renewal of Condor’s fleet, as provided for in the restructuring plan, demonstrates that the measure at issue was not limited to the minimum necessary, given that the Commission examined neither the costs nor the savings resulting from that renewal.

156    In that regard, first of all, it is apparent from the contested decision, contrary to what is stated by the applicant, and despite the redaction of certain data from the public version of the decision owing to their confidential nature, that the Commission did indeed assess both the costs of Condor’s fleet renewal (see in particular Table 4 in paragraph 45, Table 11 in paragraph 55 and Tables 14 and 16 in paragraph 62 of that decision) and the resulting savings (see in particular paragraph 28 of the decision).

157    Next, referring to information from a website provided in Annex C.5 to the reply, the applicant submits that only some of Condor’s fleet of aircraft used on long-haul flights were ageing, whereas the ‘majority’ of those aircraft had an average age that was comparable to that of the fleet of Air France and Enter Air, meaning that the measure at issue was not limited to the minimum necessary.

158    In the contested decision, the Commission found in essence that Condor’s fleet, in particular its long-haul aircraft, was ageing, so that its renewal would enable it to reduce its fuel consumption and therefore its costs, which was necessary in order to return to long-term viability. The Commission stated in paragraph 112 of the contested decision that the ‘complete’ renewal of Condor’s ageing long-haul fleet, together with other measures, would enhance Condor’s competitiveness.

159    In that regard, it is apparent from the information submitted by the applicant, first, that the average age of Condor’s fleet was 19.3 years, whereas the age of Air France’s fleet was 14.2 years and that of Enter Air’s fleet was 18 years. Second, as regards Condor’s long-haul fleet, it should be observed that, according to paragraph 28 of the contested decision, that fleet consisted of Boeing 767 aircraft, which, according to Annex C.5 to the reply, had an average age of 27 years. In those circumstances, the applicant has failed to establish that Condor’s fleet, or part of it, was not ageing or that it should not be renewed.

160    In addition, the applicant’s argument that the renewal in question shows that Condor was pursuing an aggressive expansion should be rejected. It is apparent from the contested decision that the renewal of Condor’s fleet aimed at replacing existing aircraft with new ones rather than at increasing the total number of aircraft in that fleet. On the contrary, the restructuring plan envisages a reduction in Condor’s fleet (see paragraph 147 above). In those circumstances, the applicant has not demonstrated that that measure would lead to an expansion of Condor’s business.

161    Accordingly, the applicant has not shown that the Commission should have had doubts as to whether the measure at issue was limited to the minimum necessary.

–       Item of evidence alleging that the Commission failed to demonstrate that the projections for Condor’s financial results were plausible

162    The applicant submits that the Commission failed to demonstrate that the projections for financial results underpinning Condor’s restructuring plan were plausible.

163    In the contested decision, the Commission assessed Condor’s return to viability on the basis, inter alia, of forecasts for its profit and loss and its balance sheet, equity, profitability and cash flow.

164    In the first place, the applicant criticises the Commission for having undertaken its examination of whether Condor could expect to return to financial viability by taking account of a peer group that includes airlines offering scheduled passenger flights rather than charter airlines. The applicant states that due to the poor performance of charter airlines in Europe, the inclusion of companies offering scheduled passenger flights in that peer group suggests that Condor’s returns will be higher than those of its competitors in the charter airline industry.

165    In that regard, it is sufficient to state, as the Commission has done, that the applicant’s claim that the financial results of charter airlines in Europe have been worse than those of other airlines lacks sufficient support. In the absence of data comparing the financial results of those two categories of airline in Europe, the fact relied on by the applicant, that certain charter airlines have ceased operating or have received State aid and that the business model of charter airlines faces challenges because of the growth of low-cost airlines and online travel agents, does not suffice to provide such substantiation.

166    In the second place, the applicant complains that the Commission, when comparing Condor’s median return on equity (‘ROE’) with that of its competitors, relied in paragraph 49 and Table 7 of the contested decision on an estimate of the ROE of a sample of 15 airlines that is allegedly distorted by the inclusion of United States airlines. According to the applicant, the latter airlines should not have been included in the sample on the ground that they served ‘very different’ markets and achieved higher profits than European airlines. In support of its argument, the applicant refers to a report by the McKinsey company, published on the latter’s website on 31 March 2022 and annexed to the reply.

167    However, first, as the Commission observes, the applicant cannot rely on material published after the contested decision was adopted (see, to that effect, judgment of 2 September 2010, Commission v Scott, C‑290/07 P, EU:C:2010:480, paragraph 91 and the case-law cited). Second, and in any event, the mere fact, even if it were established, that US airlines have achieved higher profits than their European competitors does not mean that their performance is of no relevance for the purpose of determining the median ROE of airlines in general. Furthermore, the applicant provides no explanation of the differences between the United States and European air transport markets such as to justify the exclusion of US airlines from that sample.

168    In the third place, the applicant’s claim that the Commission did not provide any evidence showing that the forecasts and assumptions underlying Condor’s restructuring plan were plausible and robust must be rejected. As the Commission observes, it examined in the contested decision both the plausibility of Condor’s operational forecasts underpinning the restructuring plan and the economic and financial calculations relating to the projected return on capital; it also took account of both the general market development and Condor’s performance, including in comparison with its peers. To that end, the Commission relied on several reports and studies by independent experts, clearly identified in footnote 26 to and in paragraph 43 of the contested decision. However, the applicant has not claimed, let alone demonstrated, that the information and forecasts underlying the restructuring plan were incorrect.

169    In the fourth place, the applicant submits, in essence, that the Commission, in its examination of Condor’s return to viability, failed to take into account the structural changes expected in the aviation industry following the COVID-19 pandemic, in particular lower airline profitability. It also refers, in that regard, to the report cited in paragraph 166 above.

170    In that regard, as the Commission correctly observes, its analysis was based on forecasts of the key performance indicators of airlines established by independent experts, which showed that those indicators were expected to return to their levels that preceded the COVID-19 pandemic by 2023 at the earliest. However, the applicant has not put forward any evidence or indication to show that when the contested decision was adopted the Commission should have had doubts as to the reliability of those forecasts. For the reason set out in paragraph 167 above, the applicant may also not in this instance rely on the report cited in paragraph 166 above.

171    In the fifth place, the applicant states that the assertion in paragraph 115 of the contested decision that, after the end of the restructuring period and once the market has recovered following the COVID-19 pandemic, Condor will have a higher earnings before interest and tax (EBIT) margin than that of the peer group listed in Table 8 of the contested decision as regards 2019, shows that the measure at issue was not limited to the minimum necessary since it would enable Condor to achieve greater profitability than its competitors.

172    The Commission found in paragraph 115 of the contested decision that Condor’s expected profitability towards the end of the restructuring period, that is to say in September 2023, particularly its EBIT margin, would not be below that of a peer group of airlines preceding the COVID-19 pandemic. It is only after the end of the restructuring period and after the market has fully recovered, in a time frame running up to 2026, that Condor’s expected profitability would outperform that of the peer group, according to the Commission. In that regard, the Commission stated that the forecast positive development in net earnings would increase further in 2024, due to the recovery of the leisure travel market, but that that would only allow Condor to achieve positive book equity after 2026.

173    It follows that Condor’s expected profitability, at the end of the restructuring period, will in reality be comparable to that of the competitors in question, but will not exceed it. Moreover, the forecasts in relation to Condor’s performance after the end of the restructuring period are not relevant. Indeed, the restructuring period is the only reference period for compliance by the Federal Republic of Germany and Condor with the greater part of the conditions governing authorisation of the aid (see, to that effect, judgment of 25 June 1998, British Airways and Others v Commission, T‑371/94 and T‑394/94, EU:T:1998:140, paragraph 184).

174    At the hearing, the applicant also took with issue with paragraphs 120 and 123 of the contested decision, putting forward similar arguments to those summarised in paragraph 171 and rejected in paragraphs 172 and 173 above. Accordingly, even if those arguments, raised for the first time at the hearing, are assumed to be admissible, they must be rejected on the same grounds. In fact, in paragraphs 120 and 123 of the contested decision, the Commission, still analysing Condor’s expected profitability, was comparing it, this time measured in terms of return on assets and return on capital employed (‘ROCE’), with the return on assets and ROCE of its peers before the COVID-19 pandemic. It concluded, as regards the first indicator, that Condor’s return on assets would be above that of its peers in 2023 and, as regards the second indicator, that Condor’s ROCE would, in an adverse scenario, be comparable to that of its peers, with the Commission all the time taking a view over a timescale running up to 2026.

175    Accordingly, in the light of all the foregoing considerations, it must be held that the applicant has not shown that the Commission should have had doubts as to the plausibility of Condor’s projected financial results.

–       The item of evidence alleging that the Commission did not demonstrate that Condor’s restructuring plan would enable it to return to viability

176    The applicant submits that the Commission has not demonstrated that the restructuring plan would enable Condor to return to viability under an adequately pessimistic scenario.

177    In Section 2.4.3 of the contested decision, entitled ‘Operational and financial trajectory of restructuring and return to viability’, the Commission assessed Condor’s return to viability in both a baseline and an adverse scenario. It subsequently concluded, in paragraphs 122 and 123 of the contested decision, that the adverse scenario for financial projections set out in the restructuring plan was adequate and credible and that, in such a scenario, Condor’s results would remain solid and sustainable and would not compromise its return to viability.

178    In that regard, first, the applicant’s argument that the assumptions used in the adverse scenario are not set out in a clear or detailed enough fashion in the contested decision must be rejected. The Commission clearly explained the assumptions used in the adverse scenario in paragraph 55 of that decision, which included factors related to an increase in Condor’s costs above the baseline scenario and a decrease in income below that scenario. In particular, it stated that that scenario was aimed at assessing the impact on Condor’s profit and loss and balance sheet if fuel costs were to increase further due to an increase in prices for emission allowances and offset credits and also if the growth in yield per passenger, calculated by dividing sales by the total passenger volume, was also adversely affected by increased competition.

179    Second, the applicant argues, in essence, that the adverse scenario assessed by the Commission was too limited in scope in that it did not analyse alternative assumptions concerning passenger numbers after the COVID-19 pandemic or the costs of staff, new aircraft and maintenance.

180    It is indeed true that the Commission limited itself to assessing in the adverse scenario the impact on Condor’s profit and loss and balance sheet of changes in the two factors referred to in paragraph 178 above, namely the cost of fuel and the yield per passenger.

181    However, on the one hand, by reviewing a possible adverse outturn as regards yield per passenger, the Commission, albeit indirectly, took account of some of the alternative assumptions proposed by the applicant, such as that concerning the passenger numbers.

182    On the other hand, the applicant has not submitted any evidence or indications capable of showing that Condor’s costs connected with staff, new aircraft or maintenance were likely to develop in an adverse fashion such that the Commission was also required to take such alternative assumptions into account in a specific manner.

183    The applicant has therefore not demonstrated that the Commission should have had doubts as to whether the restructuring plan would enable Condor to return to viability under an adequately pessimistic scenario.

–       Conclusion on the fourth item of evidence

184    In the light of the foregoing considerations, it must be held that the applicant has not established that the Commission should have had doubts as to whether Condor’s restructuring plan was realistic, coherent and far-reaching and likely to restore its long-term viability.

 The fifth item of evidence, alleging that the Commission has not established the appropriateness of the measure at issue

185    The applicant submits in essence that the Commission has not established that the measure at issue was appropriate for attaining the objective pursued, in disregard of points 54 and 58 of the R&R Guidelines.

186    The Commission, supported by the Federal Republic of Germany and Condor, disputes the applicant’s arguments.

187    It is clear from point 54 of the R&R Guidelines that Member States should ensure that restructuring aid is awarded in the form that allows the intended objective to be achieved in the least distortive way. In the case of undertakings in difficulty, that can be achieved by ensuring that aid is in the appropriate form to address the beneficiary’s difficulties and that it is properly remunerated. Point 58 of the R&R Guidelines states that Member States are free to choose the form that restructuring aid takes, however they must ensure that the instrument chosen is appropriate to the issue that it is intended to address. In particular, Member States should assess whether beneficiaries’ problems relate to liquidity or solvency and select appropriate instruments to address the problems identified.

188    In paragraphs 125 to 129 of the contested decision, the Commission explained why in its view the measure at issue was appropriate for achieving the intended objective. In that regard, it stated, inter alia, that Condor was facing a liquidity and solvency crisis and that the measure at issue, combined with the investment by Attestor, made it possible to address those two issues.

189    In the first place, the applicant claims that the Commission failed to examine whether there existed less distortive measures that still made it possible to achieve the objective of the measure at issue. To that end, it refers to its arguments put forward in the context of the third and fourth items of evidence that the Commission failed to review whether the intended objective could be achieved without State aid and whether the measure at issue was limited to the minimum necessary. However, since those arguments have already been rejected, in paragraphs 99 to 102 and 155 to 160 above, and since no independent argument has been made as part of this item of evidence, the applicant’s argument must be rejected.

190    In the second place, as regards whether the measure at issue was an appropriate aid instrument given the nature of the financial difficulties faced by Condor, it should first be noted that, contrary to what is claimed by the applicant, the contested decision does make clear that Condor faced not only liquidity but also solvency problems at the time that decision was adopted. On the one hand, paragraph 54 and Table 10 of the contested decision show that Condor was confronted with a short-term liquidity crisis. On the other hand, it is clear from paragraphs 46, 57, 105 and 115 of the contested decision that Condor had negative equity, which, as observed by the Commission, unchallenged on this by the applicant, is a solvency issue.

191    The examples put forward by the applicant to show that Condor did not face solvency problems must be rejected. In particular, first of all, the fact that Condor was able to benefit from cash inflows related to the liquidation of Thomas Cook in the 2021 tax year was indeed taken into account by the Commission in its review of Condor’s return to viability (see paragraph 53 of the contested decision), but it concluded in that decision that Condor’s equity nevertheless remained negative after that time (see paragraphs 46 and 57 of the contested decision). Next, the fact also relied on by the applicant that the insolvency court had on 30 November 2020 pronounced Condor’s exit from the insolvency procedure, which was noted in paragraph 22 of the contested decision and was therefore taken into account by the Commission, does not mean that Condor no longer faced a solvency issue as of that date. The fact remains that, despite its exit from that procedure, the forecast at the time the contested decision was adopted showed that Condor would continue to have negative equity at least until 2026 in the baseline scenario (see paragraph 46 of the contested decision).

192    Second, the applicant is wrong when it claims that the contested decision contains no analysis of the adequacy of the aid instrument selected. The Commission explained in paragraph 128 of the contested decision why in its view the measure at issue, combined with the investment by Attestor, was an appropriate measure for resolving Condor’s liquidity and solvency problems. In particular, it stated, without being challenged on that point by the applicant, that the measure at issue would free liquidity in the short term owing to the deferral of interest and repayment obligations and reduce Condor’s debt owing to the partial write-off of loans. According to the Commission, that measure complemented the investment by Attestor, which would remedy Condor’s imminent liquidity crisis and improve its equity position.

193    Third, according to the applicant, other measures exist that are less distortive of competition, such as debt-for-equity swaps, loans or loan guarantees. However, the applicant has not submitted any evidence or indication capable of showing that the other measures it has suggested would have made it possible to resolve both Condor’s liquidity and its solvency problems, as the measure at issue does. In addition, it should be borne in mind that while, in accordance with point 58 of the R&R Guidelines states, Member States should ensure that the instrument chosen for granting restructuring aid is appropriate to the issue that it is intended to address, they are free to choose the form of such aid. Lastly, as the Commission correctly states, the applicant fails to explain the relevance of Attestor’s financial capacity for the purpose of assessing the appropriateness of the measure at issue since Attestor’s involvement was conditional upon the grant of that measure.

194    Fourth, the applicant’s argument that ‘it looks as if’ the measure at issue was not being used to resolve the causes of Condor’s difficulties but to address its other weaknesses, such as the age of its fleet, is speculative and unsubstantiated.

195    In the light of the foregoing considerations, it must be found that the applicant has not shown that the Commission should have had doubts as to the appropriateness of the measure at issue.

 The sixth item of evidence, to the effect that the Commission did not establish the proportionality of the measure at issue

196    The applicant submits in essence that the Commission has not demonstrated that the measure at issue was proportionate, contrary to points 61 to 64 and 67 of the R&R Guidelines, in that the measure at issue fails to ensure own contributions to the restructuring costs and sufficient burden-sharing.

197    The Commission, supported by the Federal Republic of Germany and Condor, disputes the applicant’s arguments.

198    Points 61 to 64 of the R&R Guidelines require in essence that the beneficiary, its shareholders or creditors, the business group to which it belongs or new investors should contribute to the restructuring costs from their own resources. That contribution must be significant, real, as high as possible, and free of aid. An own contribution will normally be considered to be adequate if it amounts to at least 50% of the restructuring costs.

199    In paragraph 132 of the contested decision, the Commission identified three sources of own contributions within the meaning of the R&R Guidelines, namely (i) the financing provided by Attestor in connection with the acquisition of Condor, (ii) write-offs of claims by Condor’s creditors as part of the insolvency plan endorsed by the insolvency court and (iii) permanent cost reductions as part of the restructuring plan. As regards the first source, the Commission stated in paragraph 132(a) of the contested decision that the financing by Attestor of EUR 200 million injected into Condor’s share capital and of EUR 250 million for the renewal of Condor’s fleet was firm and binding.

200    In the first place, the applicant submits that the second source of financing referred to in paragraph 199 above, namely the write-off of claims by Condor’s creditors, could in itself constitute State aid, such that, in accordance with point 63 of the R&R Guidelines, it cannot be taken into account in order to determine whether the own contribution was appropriate and sufficient.

201    However, it should be observed, as the Commission has done, that that argument, which is moreover purely speculative since it is not substantiated in any way, is in any case ineffective. It is apparent from paragraphs 127, 132(a) and 133 of the contested decision that the first source of financing referred to in paragraph 199 above, namely the financing provided by Attestor in the purchase of Condor, amounted to EUR 450 million, while paragraph 133 of the contested decision shows that the total amount of restructuring aid granted to Condor through the measure at issue was EUR 321.18 million. The applicant has not disputed the Commission’s assertion in paragraph 133 of the contested decision that Attestor’s own contribution already by itself amounted to 77% of the financing of the restructuring plan, that is to say, more than 50% of the restructuring costs, such that the requirement laid down in point 64 of the R&R Guidelines was satisfied, that being the case even if the second source of financing of the measure at issue criticised by the applicant is disregarded.

202    In the second place, the applicant submits that the Commission infringed point 67 of the R&R Guidelines in that it did not examine in the contested decision whether the measure at issue provided for terms that afforded the State a reasonable share of future gains in the value of Condor. It states that the Commission should have carried out such an assessment because the measure at issue improved Condor’s financial position in terms of its equity, for the purposes of that point.

203    The Commission submits, in essence, that it was not required to examine in the contested decision whether the Federal Republic of Germany benefited from a reasonable share of future gains in the value of Condor, for the purposes of point 67 of the R&R Guidelines, since, in its view, that requirement applies only where, first, the measure at issue constitutes a capital injection and, second, the Member State concerned has a shareholding in the beneficiary’s capital, which is not the case here.

204    It is apparent from point 65 of the R&R Guidelines that where State support is given in a form that enhances the beneficiary’s equity position, for example where the State provides grants, injects capital or writes off debt, that can have the effect of protecting shareholders and subordinated creditors from the consequences of their choice to invest in the beneficiary; that can create moral hazard and undermine market discipline. Consequently, aid to cover losses should only be granted on terms which involve adequate burden sharing by existing investors.

205    In accordance with point 66 of the R&R Guidelines, adequate burden sharing normally means that incumbent shareholders and, where necessary, subordinated creditors must absorb losses in full. Subordinated creditors should contribute to the absorption of losses either via conversion into equity or write-down of the principal of the relevant instruments. Therefore, State intervention should only take place after losses have been fully accounted for and attributed to the existing shareholders and subordinated debt holders.

206    Under point 67 of the R&R Guidelines, adequate burden sharing also means that any State aid that enhances the beneficiary’s equity position should be granted on terms that afford the State a reasonable share of future gains in value of the beneficiary, in view of the amount of State equity injected in comparison with the remaining equity of the company after losses have been accounted for.

207    In that regard, it should be observed in the first place that the Commission failed in the contested decision to assess whether the measure at issue complied with the requirements set out in point 67 of the R&R Guidelines. There is nothing in the contested decision to suggest that the Commission addressed the question of whether the measure at issue had been granted on terms that would afford the Federal Republic of Germany a reasonable share of future gains in value of Condor.

208    Consequently, it is necessary to assess whether, as the Commission maintains, it was able to take the view, without entertaining any doubts, that the measure at issue did not fall within the scope of point 67 of the R&R Guidelines, meaning that it was not required to carry out a review in the contested decision of whether that measure complied with the requirement set out in that point.

209    In that regard, it must be borne in mind that the interpretation of a provision of EU law requires that account be taken not only of its wording, but also of its context and the objectives and purpose pursued by the act of which it forms part (see judgment of 22 June 2023, Pankki S, C‑579/21, EU:C:2023:501, paragraph 38 and the case-law cited).

210    In that respect, first, as regards the literal interpretation of point 67 of the R&R Guidelines, it should be pointed out that, according to the wording of that point, the requirement to provide for terms that afford the State a reasonable share of future gains in value of the beneficiary applies to ‘any State aid that enhances the beneficiary’s equity position’.

211    Point 65 of the R&R Guidelines provides three examples of State aid given ‘in a form that enhances the beneficiary’s equity position’, namely grants, injections of capital and write-offs of debt.

212    In the present case, the measure at issue is in the form, inter alia, of a partial write-off of debt, such that it must be classified as ‘State aid that enhances the beneficiary’s equity position’ within the meaning of point 67 of the R&R Guidelines.

213    Accordingly, the wording of the introductory part of point 67 of the R&R Guidelines, read in conjunction with the wording of point 65 thereof, suggests that the measure at issue falls within the scope of point 67 of the R&R Guidelines.

214    It follows that the interpretation advocated by the Commission, that point 67 of the R&R Guidelines applies only to injections of capital and only where the State concerned has a shareholding in the capital of the beneficiary, conflicts with the wording of the introductory part of that point, read in conjunction with point 65 of the R&R Guidelines, from which it is apparent that the requirement set out in point 67 is intended to apply both to injections of capital and to write-offs of debt and, therefore, both to situations where the State has a shareholding in the capital of the beneficiary and to situations where it is a creditor thereof.

215    That being said, it is also true, as the Commission observes, that the words ‘in view of the amount of State equity injected in comparison with the remaining equity of the company after losses have been accounted for’, at the end of point 67 of the R&R Guidelines, refer only to a situation where there has been an injection of capital.

216    The wording of point 67 of the R&R Guidelines thus appears to be somewhat inconsistent since, on the one hand, its introductory part states that it is to apply to ‘any State aid that enhances the beneficiary’s equity position’, namely grants, capital injections and debt write-offs, while its final part refers, on the other hand, to ‘State equity injected’.

217    In that regard, it should nevertheless be observed that the latter part of the sentence follows immediately on from the requirement that the State should be afforded a ‘reasonable share’ of future gains in value of the beneficiary. Accordingly, it may be understood as an indication of what constitutes, quantitatively speaking, a ‘reasonable share’, which is to be determined on the basis of the proportion that the amount paid by the State represents in comparison with the amount of the remaining equity of the beneficiary after losses have been accounted for. That interpretation would thus make it possible to reconcile the introductory and final parts of point 67 of the R&R Guidelines.

218    In any event, the inconsistent wording of point 67 of the R&R Guidelines referred to in paragraph 215 above, which is, moreover, attributable to the Commission, as it drew up those guidelines, should have raised doubts on its part as to whether the measure at issue fell within the scope of point 67 of the R&R Guidelines and led it to examine that provision more thoroughly in the light of its context and objectives, which it failed to do.

219    Indeed, where the wording of a provision of EU law causes difficulties of interpretation, it is necessary to examine that provision in the light of the objectives of the act of which it forms part and, where it is open to several interpretations, preference must be given to that interpretation which ensures that the provision retains its effectiveness (see, to that effect, judgments of 24 February 2000, Commission v France, C‑434/97, EU:C:2000:98, paragraph 21 and the case-law cited, and of 4 October 2001, Italy v Commission, C‑403/99, EU:C:2001:507, paragraph 28).

220    Accordingly, second, as regards the contextual interpretation of point 67 of the R&R Guidelines, it should be noted that that point forms part of Section 3.5.2.2 of those guidelines, entitled ‘Burden sharing’. That section begins with point 65, which, as observed in paragraph 204 above, refers, without distinction, to grants, injections of capital and debt write-offs as forms of State aid that enhance the beneficiary’s equity position.

221    Similarly, there is nothing in the wording of point 66 of the R&R Guidelines, which forms part of the same section of those guidelines and which states, in essence, that State intervention should only take place after losses have been fully accounted for and attributed to the existing shareholders and subordinated debt holders, to suggest that that rule is intended to apply only to certain forms of State aid and not others. On the contrary, the general reference to State intervention (‘State intervention should only take place’) and the absence of any other statement to the contrary indicate that point 66 is to apply regardless of the form of that intervention.

222    Accordingly, the introductory part of point 67 of the R&R Guidelines, in that it refers to ‘any State aid that enhances the beneficiary’s equity position’, accords with the scope of points 65 and 66 thereof.

223    In addition, it should be observed that the requirement set out in point 67 of the R&R Guidelines is additional to those set out in points 65 and 66 of the guidelines, as is shown by the statement that ‘adequate burden sharing will also mean’. It is also important to point out that the Member States and the Commission do not enjoy discretion as regards their obligation to satisfy the requirement of point 67 of the R&R Guidelines, since that point provides that ‘any’ State aid that enhances the beneficiary’s equity position ‘should’ be granted on terms that afford the State a reasonable share of future gains in value of the beneficiary. That interpretation is confirmed by point 68 of the R&R Guidelines, which provides for exceptions to full implementation of the requirements set out in point 66 thereof, but not to that set out in point 67. Accordingly, the fact that the requirements of points 65 and 66 of the R&R Guidelines have been satisfied in a particular case does not exempt the Member States and the Commission from ensuring that the requirement set out in point 67 has also been met.

224    It follows that points 66 and 67 of the R&R Guidelines lay down two autonomous requirements, the content and application of which relate to different points in time. First, the requirement in point 66 concerns absorption of the beneficiary’s losses by existing shareholders and subordinated debt creditors, which must be implemented prior to intervention by the State. Second, point 67 refers to a situation in the future, namely that of future gains in value of the beneficiary, and provides that, in such a case, the State must obtain a reasonable share of those gains in value.

225    However, there is nothing to indicate that points 65, 66 and 67 of the R&R Guidelines should having differing scopes, depending on the form taken by the State support, provided that it enhances the beneficiary’s equity position. In particular, the broad logic of the requirements foreseen by points 66 and 67 of the R&R Guidelines and the fact that they are cumulative suggest that, as with point 65 of those guidelines, they are intended to apply to any State aid aimed at achieving such an enhancement. The obligation to absorb losses before the State intervenes and the necessity to ensure that it is afforded a reasonable share of future gains in value of the beneficiary are mutually reinforcing and complementary, since dealing with the beneficiary’s losses and the support of the State are an essential condition for ensuring the beneficiary’s subsequent return to viability and, therefore, its profitability. There thus appears to be no legitimate reason to justify excluding certain forms of aid from the scope of the obligation set out in point 67 of the R&R Guidelines.

226    Third, as regards the teleological interpretation of point 67 of the R&R Guidelines, it is apparent in particular from points 9, 11, 65, 87 and 90 thereof that the provisions on adequate burden sharing are intended inter alia to prevent moral hazard. Accordingly, as observed in paragraph 204 above, point 65 of those guidelines states that where State support is given in a form that enhances the beneficiary’s equity position, for example where the State provides grants, injects capital or writes off debt, this can have the effect of protecting shareholders and subordinated creditors from the consequences of their choice to invest in the beneficiary. That can create moral hazard and undermine market discipline.

227    However, the Commission does not refer to any element that is capable of showing that the risk of moral hazard arises only where a Member State injects capital into the beneficiary, but not where it writes off its debt or provides it with a grant. In reality, no part of the R&R Guidelines makes it possible to draw such a conclusion. On the contrary, according to point 65 of the R&R Guidelines, such a risk arises for any State support given in a form that enhances the beneficiary’s equity position, such as grants, injections of capital and debt write-offs.

228    Furthermore, it should be borne in mind that, as is apparent in particular from point 9 of the R&R Guidelines, the risk of moral hazard consists of the fact that undertakings anticipating that they are likely to be rescued or restructured when they run into difficulty may embark upon excessively risky and unsustainable business strategies. Both the requirement in point 66 of the R&R Guidelines, concerning the absorption of the beneficiary’s losses by its current shareholders and subordinated creditors, and that of point 67 of those guidelines, on the obligation to afford the State a share of the beneficiary’s future profits, contribute to reducing possible incentives for an undertaking to take excessive risks in order to generate more profits.

229    It follows that the underlying objective of point 67 of the R&R Guidelines cannot be fully achieved if certain types of aid measure, such as the write-off of debt, were to be excluded from its scope, even though they enhance the beneficiary’s equity position and give rise to the same moral hazard as that resulting from a capital injection.

230    In addition, both the R&R Guidelines and the Communication from the Commission COM(2012) 209 final of 8 May 2012 on EU State aid modernisation, to which the guidelines refer, underline the importance of the principle of the efficiency or effectiveness of public spending. That communication also emphasises the importance of the sound use of public resources, better use of taxpayers’ money, budgetary consolidation and the need to avoid wasting public resources. Ensuring the State a reasonable share of future gains in value of the beneficiary, where it grants restructuring aid, and whether that is through a grant, an injection of capital or a debt write-off, is consistent with those objectives.

231    Moreover, contrary to what the Commission argued at the hearing, it is incorrect to assert that a State may obtain ‘a reasonable share of future gains in value of the beneficiary’, as provided for by point 67 of the R&R Guidelines, only when it holds a shareholding in the beneficiary. As the applicant rightly states, even where the State does not have a shareholding in the capital of the beneficiary and is thus merely one of its creditors, it could in any event benefit from future gains in the value or the future profits of the beneficiary which are, at least in part, generated owing to the aid, by stipulating, for example, where there has been a partial write-off of debt such as that in the present case, that there be a variable rate of interest on the portion of its claim that has not been written off that increases in line with a rise in the value or profits of the beneficiary. Another mechanism that could allow a State which has written off a part of the debt owed to it by a beneficiary to share in future gains in the value or the future profits of the beneficiary is, for example, a commitment by the beneficiary to repay all or part of its written-off debt if its fortunes improve.

232    Lastly, Condor’s argument, that the future repayment of the remaining portion of the debt left from the COVID-19 loans of 2020 could be considered as ensuring the State ‘a reasonable share of future gains in value’ of Condor, within the meaning of point 67 of the R&R Guidelines, must be rejected. First, it suffices to observe that there is nothing in the contested decision to suggest that the Commission considered that the possible repayment of the portion of debt not written off would by itself afford the State ‘a reasonable share of future gains in value’ of Condor, within the meaning of point 67 of the R&R Guidelines. However, according to settled case-law, the statement of reasons for the contested decision cannot be supplemented during the proceedings (see, to that effect, judgment of 15 December 2021, Oltchim v Commission, T‑565/19, EU:T:2021:904, paragraph 275 and the case-law cited). Second, and in any event, Condor’s argument cannot succeed, otherwise it risks rendering point 67 of the R&R Guidelines meaningless. By its very essence, a partial write-off of debt implies that the part of the debt not written off will be repaid. That argument thus amounts to excluding de facto the partial write-off of debt from the scope of point 67 of the R&R Guidelines, which would, however, conflict with the literal, contextual and teleological interpretation of that point.

233    It follows that, taking account of the literal, contextual and teleological interpretation of point 67 of the R&R Guidelines, the Commission was not entitled, without having any doubts, to find that the measure at issue did not fall within the scope of that point and fail to examine whether that measure complied with the requirements set out in that point.

234    Accordingly, it must be concluded that the applicant has demonstrated to the requisite legal standard that the Commission should have had doubts as to whether the measure at issue satisfied the requirement set out in point 67 of the R&R Guidelines.

 The seventh item of evidence, alleging that the Commission erred in its review of the negative effects of the measure at issue

235    The applicant puts forward a seventh item of evidence, alleging that the Commission did not properly review the negative effects of the measure at issue and the measures intended to limit distortions of competition.

236    In that regard, it should be observed that points 87 and 90 of the R&R Guidelines establish a connection between burden-sharing on the one hand and the calibration of measures to limit distortions of competition on the other. According to point 87 of those guidelines, measures to limit distortions of competition should address both moral hazard concerns and possible distortions in the markets where the beneficiary operates; the extent of such measures depends on several factors, such as, in particular, the extent to which moral hazard concerns remain following the application of own contribution and burden-sharing measures. In addition, point 90 of the R&R Guidelines states that the Commission must also assess the degree of own contribution and burden sharing. To that end, it states that greater degrees of own contribution and burden sharing than those required under Section 3.5.2 of the guidelines, by limiting the amount of aid and moral hazard, may reduce the necessary extent of measures to limit distortions of competition.

237    In the present case, it is apparent from paragraph 150 of the contested decision, in essence, that, in the context of the calibration of measures to limit distortions of competition, the Commission took into consideration, among other factors, the extent of own contribution and burden sharing.

238    It follows that the doubts that the Commission should have had as regards compliance with the requirement set out in point 67 of the R&R Guidelines in respect of adequate burden sharing necessarily affect the Commission’s assessment in paragraphs 141 to 152 of the contested decision as regards the scope of measures to limit the distortions of competition that are applicable to Condor.

 Conclusion

239    It is apparent from paragraphs 202 to 234 and 235 to 238 above that the applicant has established to the requisite legal standard that the Commission should have had doubts, first, as to whether the measure at issue satisfied the requirement of adequate burden sharing set out in point 67 of the R&R Guidelines and, second, whether the scope of the measures to limit distortions of competition complied with the requirements set out in particular in Section 3.6.2.2 of those guidelines.

240    In that regard, it should be observed that, according to settled case-law, in the specific area of State aid, the Commission is bound by the guidelines and notices that it issues, to the extent that they do not depart from the rules in the Treaty (see judgment of 2 December 2010, Holland Malt v Commission, C‑464/09 P, EU:C:2010:733, paragraph 47 and the case-law cited).

241    Furthermore, according to settled case-law, if the examination carried out by the Commission during the preliminary examination procedure is insufficient or incomplete, this constitutes evidence of the existence of serious difficulties (see judgment of 10 February 2009, Deutsche Post and DHL International v Commission, T‑388/03, EU:T:2009:30, paragraph 95 and the case-law cited). Accordingly, the Commission’s failure to examine compliance with the requirement set out in point 67 of the R&R Guidelines on adequate burden sharing renders that examination incomplete and insufficient as regards the negative effects of the measure at issue and, in particular, the calibration of measures to limit distortions of competition, the scope of which depends, inter alia, on the degree of burden sharing.

242    It follows that the incomplete and insufficient examination with respect to the burden-sharing requirements and the negative effects of the measure at issue is indicative of the doubts that the Commission should have had in that regard. That evidence is of significant weight in the context of an overall assessment of the body of evidence adduced by the applicant in order to demonstrate that the Commission was not in a position, on the date of adoption of the contested decision, to resolve all the serious difficulties encountered concerning the compatibility of the measures at issue with the internal market. Indeed, first, the requirements of the R&R Guidelines as regards burden sharing are integral to the examination of the proportionality of the measure at issue. Second, in order to assess whether aid adversely affects trading conditions to an extent contrary to the common interest, within the meaning of Article 107(3)(c)TFEU, it is necessary to weigh the beneficial effects of the aid against its adverse effects on trading conditions and the maintenance of undistorted competition, that necessity being no more than an expression of the principle of proportionality (see, to that effect, judgments of 25 June 1998, British Airways and Others v Commission, T‑371/94 and T‑394/94, EU:T:1998:140, paragraph 282, and of 19 September 2018, HH Ferries and Others v Commission, T‑68/15, EU:T:2018:563, paragraph 211).

243    It must be concluded that the applicant has demonstrated to the requisite legal standard that the Commission should have had doubts justifying the initiation of the procedure under Article 108(2) TFEU.

244    Accordingly, the contested decision must be annulled, with there being no need to examine the eighth item of evidence put forward by the applicant, relating to infringement of the principles of non-discrimination, the free provision of services and free establishment, or its tenth plea, alleging breach of the duty to state reasons.

 Costs

245    Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has been unsuccessful, it must be ordered to bear its own costs and to pay those of the applicant, in accordance with the form of order sought by the latter.

246    In accordance with Article 138(1) and (3) of the Rules of Procedure, the Federal Republic of Germany and Condor are to bear their own costs.

On those grounds,

THE GENERAL COURT (Eighth Chamber)

hereby:

1.      Annuls Commission Decision C(2021) 5729 final of 26 July 2021 on State aid SA. 63203 (2021/N) – Germany – Restructuring aid for Condor;

2.      Orders the European Commission to bear its own costs and to pay those incurred by Ryanair DAC;

3.      Orders the Federal Republic of Germany and Condor Flugdienst GmbH to bear their own costs.

Delivered in open court in Luxembourg on 8 May 2024.

*      Language of the case: English.

1      This judgment is published in extract form.

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