JUDGMENT OF THE GENERAL COURT (Eighth Chamber)
25 June 2025 (*)
( State aid - German air transport market - Public loan guaranteed by Germany to Condor Flugdienst in the context of the COVID-19 pandemic - Decision not to raise any objections - Aid intended to make good the damage caused by an exceptional occurrence - Article 107(2)(b) TFEU - Assessment of the damage - Direct causal link - Assessment of the amount of the aid - Principle of non-discrimination - Freedom to provide services - Freedom of establishment - Obligation to state reasons )
In Case T‑366/22,
Ryanair DAC, established in Swords (Ireland), represented by E. Vahida, S. Rating and I.‑G. Metaxas‑Maranghidis, lawyers,
applicant,
v
European Commission, represented by L. Nicolae and V. Bottka, acting as Agents,
defendant,
supported by
Federal Republic of Germany, represented by J. Möller and P.‑L. Krüger, acting as Agents,
and by
Condor Flugdienst GmbH, established in Neu‑Isenburg (Germany), represented by A. Rosenfeld, S. Lünenbürger, S. Blazek, A. Birnstiel and K. Reiter, lawyers,
interveners,
THE GENERAL COURT (Eighth Chamber),
composed of A. Kornezov (Rapporteur), President, G. De Baere and S. Kingston, Judges,
Registrar: P. Cullen, Administrator,
having regard to the written part of the procedure,
further to the hearing on 13 November 2024,
gives the following
Judgment
1 By its action under Article 263 TFEU, the applicant, Ryanair DAC, seeks the annulment of the decision of European Commission 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 Flugdienst GmbH (OJ 2022 C 177, p. 1; 'the contested decision').
I. Background to the dispute
2 Condor Flugdienst GmbH ('Condor') is a German airline which operates charter flights in particular. It provides air transport services to individual passengers and tour operators 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 Those aid measures can be summarised in chronological order as follows.
5 First of all, following the insolvency of Thomas Cook, which ceased its operations and was put into compulsory liquidation on 23 September 2019, and the request for the opening of insolvency proceedings in respect of Condor, the Federal Republic of Germany notified the Commission, on 25 September 2019, of an individual aid measure in favour of Condor in the form of a EUR 380 million rescue loan, granted by the Kreditanstalt für Wiederaufbau (KfW – Credit Institution for Reconstruction) and accompanied by a State guarantee. That measure was restricted to a period of six months and was intended to maintain an orderly air transport operation and to limit the negative consequences for Condor, its passengers and its staff caused by the liquidation of Thomas Cook, enabling Condor to continue operating until it reached a settlement with its creditors and the sale of the company was carried out ('the rescue aid').
6 By Decision C(2019) 7429 final of 14 October 2019 on State aid SA.55394 (2019/N) – Germany – Rescue aid to Condor (OJ 2020 C 294, p. 3; 'the decision on rescue aid'), the Commission, without initiating the formal investigation procedure provided for in Article 108(2) TFEU, concluded that that measure constituted State aid within the meaning of Article 107(1) TFEU and that it was compatible with the internal market on the basis of Article 107(3)(c) TFEU. Furthermore, the Commission found that the German authorities had undertaken to communicate to the Commission, not later than six months after the authorisation of the rescue aid, either proof that the loan had been repaid, or a restructuring or liquidation plan. The decision on rescue aid was the subject of an action before the Court, which was dismissed by the judgment of 18 May 2022, Ryanair v Commission (Condor; rescue aid) (T‑577/20, EU:T:2022:301), which has become final.
7 In parallel with the adoption of the decision on rescue aid, in October 2019 Condor began to implement a restructuring plan, which was to run until 30 September 2023. On 1 December 2019, the Amtsgericht Insolvenzgericht Frankfurt am Main (Local Court having jurisdiction in insolvency matters, Frankfurt-am-Main, Germany) opened insolvency proceedings in respect of Condor. As part of a tendering procedure, three offers for the purchase of Condor were submitted and the tender of Polska Grupa Lotnicza (PGL) was accepted. Even though an agreement for the purchase of Condor by PGL was signed on 24 January 2020, PGL then withdrew from that agreement on 13 April 2020.
8 With the COVID-19 pandemic having in the meantime impacted the aviation sector in the European Union, 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').
9 First, 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] (OJ 2020 C 310, p. 5; 'the earlier decision'), the Commission, without initiating the formal investigation procedure provided for in Article 108(2) TFEU, concluded that the COVID-19 aid of 2020, in the form of two loans totalling EUR 550 million granted by KfW and 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.
10 The nominal amount of the loans to Condor notified by the Federal Republic of Germany was, totalling EUR 550 million, as follows:
– Loan 1:
– Tranche A: EUR 256 million
– Tranche B: EUR 273.8 million
– Loan 2: EUR 20.2 million.
11 The aid element approved by the earlier decision was EUR 267.1 million and was as follows:
– Loan 1:
– Tranche A: EUR 18.9 million
– Tranche B: EUR 246.8 million
– Loan 2: EUR 1.4 million.
12 By judgment of 9 June 2021, Ryanair v Commission (Condor; Covid-19) (T‑665/20, EU:T:2021:344), the Court annulled the earlier decision owing to a failure to state reasons, while suspending the effects of that annulment pending the adoption of a new decision by the Commission. The Court ruled in essence that, having regard to the grounds of the earlier decision, 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 proceedings, 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 that decision, namely the cancellation and rescheduling of Condor's flights as a result of the travel restrictions imposed in the context of that 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).
13 Following the judgment of 9 June 2021, Ryanair v Commission (Condor; Covid-19) (T‑665/20, EU:T:2021:344), the Federal Republic of Germany carried out an ex post assessment of the damage suffered by Condor for the period from 17 March to 31 December 2020. That assessment excluded the costs incurred in the context of the extension of its insolvency proceedings and estimated the damage suffered by Condor as a result of the travel restrictions and containment measures during that period at EUR 175.355 million. Consequently, the aid element which was the subject of the earlier decision, totalling EUR 267.1 million, exceeded the amount of damage actually suffered by EUR 91.745 million, with the result that Condor was overcompensated by that amount. Condor was thus, in principle, required to repay that sum.
14 Second, on 23 July 2021, the Federal Republic of Germany notified the Commission of the COVID-19 aid of 2021, which consisted of a partial write-off of a EUR 60 million debt from tranche B of loan 1 of the COVID-19 aid of 2020 that was the subject of the earlier decision, the objective of which was to compensate Condor for the damage suffered during the period from 1 January to 31 May 2021.
15 On 24 July 2021, the Federal Republic of Germany notified the Commission of its intention to grant restructuring aid to Condor, in two parts. The first part consisted, on the one hand, of a modification to the terms of the loans as set out in the earlier decision and, on the other hand, of the partial write-off of EUR 90 million of debt from tranche B of loan 1 of the COVID-19 aid of 2020 that was the subject of that decision. The second part involved a write-off of EUR 20.2 million, corresponding to the interest due on tranche B of loan 1 of the COVID-19 aid of 2020 that was the subject of that decision ('the restructuring aid').
16 The two aid measures referred to in paragraphs 14 and 15 above represented, in total, a write-off of EUR 150 million of debt from tranche B of loan 1, which had the effect of reducing the nominal amount of that tranche to EUR 123.8 million.
17 In that context, the Federal Republic of Germany submitted to the Commission an amended notification of the COVID-19 aid of 2020 ('the measure at issue'). The total nominal amount of the two planned loans was thus set at EUR 400 million, while the aid amount was set at EUR 144.1 million on account of the partial write-off of debt corresponding to tranche B of loan 1. In addition, the amended notification no longer included the costs connected with the extension of Condor's insolvency proceedings.
18 Accordingly, the nominal amount of the loans under the measure at issue was now as follows:
– Loan 1:
– Tranche A: EUR 256 million
– Tranche B: EUR 123.8 million
– Loan 2: EUR 20.2 million.
19 The aid element was now as follows:
– Loan 1:
– Tranche A: EUR 18.9 million
– Tranche B: EUR 123.8 million
– Loan 2: EUR 1.4 million.
20 The Federal Republic of Germany stated that the partial debt write-offs provided for by the COVID-19 aid of 2021 and by the restructuring aid thus resulted, inter alia, in the complete absorption of the overcompensation of EUR 91.745 million received by Condor for the period from 17 March to 31 December 2020 (see paragraph 13 above).
21 By Decision C(2021) 5731 final of 26 July 2021 on State Aid SA.63617 (2021/N) – Germany – COVID-19: Condor damage compensation II, which had become final in the absence of any legal action against it, the Commission approved the COVID-19 aid of 2021.
22 On the same day, by its Decision C(2021) 5729 final on State aid SA.63203 (2021/N) – Germany – Restructuring aid for Condor ('the decision on restructuring aid'), the Commission approved the restructuring aid. That decision was annulled by the judgment of 8 May 2024, Ryanair v Commission (Condor; restructuring aid) (T‑28/22, under appeal, EU:T:2024:301), on the ground that the Commission should have had doubts as to whether the contested measure satisfied the requirement of adequate burden sharing laid down in point 67 of the R&R Guidelines (judgment of 8 May 2024, Ryanair v Commission (Condor; restructuring aid), T‑28/22, under appeal, EU:T:2024:301, paragraph 234).
23 By the contested decision, the Commission, without initiating the formal investigation procedure provided for in Article 108(2) TFEU, concluded that the measure at issue constituted State aid within the meaning of Article 107(1) TFEU and that it was compatible with the internal market on the basis of Article 107(2)(b) TFEU.
II. Forms of order sought
24 The applicant claims that the Court should:
– annul the contested decision;
– order the Commission to pay the costs.
25 The Commission, the Federal Republic of Germany and Condor contend that the Court should:
– dismiss the action;
– order the applicant to pay the costs.
III. Law
26 In support of its action, the applicant puts forward four pleas in law, alleging, in essence, first, misapplication of Article 107(2)(b) TFEU and a manifest error of assessment, second, breach of the principles of non-discrimination, the freedom to provide services and the freedom of establishment, third, infringement of the applicant's procedural rights, and fourth, infringement of the obligation to state reasons.
A. Admissibility of the action in so far as it seeks to challenge the merits of the contested decision
27 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. It also submits that it is directly and individually concerned by the contested decision, which enables it to bring an action for annulment of that decision, taken without initiating the formal investigation procedure, seeking both to safeguard its procedural rights and to challenge the merits of that decision.
28 The Commission, the Federal Republic of Germany and Condor do not dispute the standing of the applicant to bring proceedings in order to protect its procedural rights. By contrast, in their view, the applicant's line of argument is not admissible to challenge the merits of the contested decision.
29 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. Since the formal investigation procedure was not initiated, the interested parties that could have submitted comments during that stage were denied 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 a party concerned within the meaning of Article 108(2) TFEU seeking the annulment of the decision not to raise objections is admissible in so far as that party seeks to safeguard the procedural rights available to it under that 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).
30 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 judgment of 8 May 2024, Ryanair v Commission (Condor; restructuring aid), T‑28/22, under appeal, EU:T:2024:301, paragraph 18 (not published) and the case-law cited).
31 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.
32 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.
33 In that regard, it is 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. 223; 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).
34 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 recalled in paragraph 33 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).
35 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).
36 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'.
37 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.
38 First, as was discussed at the hearing, the applicant was in competition with Condor only in relation to sales of 'dry seats', that is to say, seats sold directly to end customers, and, 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, 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 (judgment of 8 May 2024, Ryanair v Commission (Condor; restructuring aid), T‑28/22, under appeal, EU:T:2024:301, paragraph 26 (not published)). It follows that while the applicant was indeed a competitor of Condor, the competitive relationship between them was rather limited. This is supported by the fact that, according to the applicant itself, it was in direct competition with Condor on only 16 routes to or from Germany in 2021.
39 Second, even supposing that, unlike Condor and other airlines, the applicant did not receive State aid from the German State, that 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 applicant's claim that the market is 'concentrated' or characterised by 'overcapacity'.
40 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.
41 It follows that the first two pleas, concerning the merits of the contested decision, are inadmissible.
42 By contrast, the third plea, by which the applicant seeks to safeguard its procedural rights, is admissible.
43 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 two pleas, to which the applicant refers in its third 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).
44 As regards the fourth plea, alleging breach of the obligation to state reasons, it should be noted that disregard for the obligation to state reasons goes to an issue of infringement of essential procedural requirements and is a matter of public policy which must be raised by the EU judicature of its own motion and does not relate to the substantive legality of the contested decision (see judgment of 18 May 2022, Ryanair v Commission (Condor; rescue aid), T‑577/20, EU:T:2022:301, paragraph 21 and the case-law cited).
B. The merits of the third and fourth pleas in law
1. The third plea in law, alleging infringement of the applicant's procedural rights
45 The applicant submits, in order to demonstrate that the Commission should have had doubts as to whether the measure at issue was compatible with the internal market, two sets of evidence corresponding, in essence, to its first two pleas, to which it refers. Those sets of evidence concern the compatibility of that measure, first, with Article 107(2)(b) TFEU and, second, with the general principles of non-discrimination, freedom to provide services and freedom of establishment.
46 As a preliminary point, it should be recalled that, 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 the Commission 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).
47 Article 4 of Regulation 2015/1589 shows in that regard that, in so far as the measure notified by the Member State concerned does in fact constitute aid, it is the presence or absence of 'doubts' as to the compatibility of that measure with the internal market that enables the Commission to decide whether or not to initiate the formal investigation procedure at the end of its preliminary examination.
48 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 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).
49 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).
50 It should also be recalled that Article 107(2)(b) TFEU provides that aid to make good the damage caused by natural disasters or exceptional occurrences is compatible with the internal market. Aid that fulfils the three conditions set out in Article 107(2)(b) TFEU (a natural disaster or an exceptional occurrence has taken place, there is a direct link between the damage to be compensated and the exceptional occurrence and the aid is proportional to the damage caused by the exceptional occurrence) must be declared compatible with the internal market (see judgment of 25 June 2008, Olympiaki Aeroporia Ypiresies v Commission, T‑268/06, EU:T:2008:222, paragraph 51 and the case-law cited).
51 Furthermore, it is apparent from the case-law that the FEU Treaty does not preclude a concurrent application of Article 107(2)(b) and Article 107(3)(c) TFEU, provided that the conditions of each of those two provisions are met. Accordingly, there is nothing to prevent the beneficiary of aid under Article 107(2)(b) TFEU from being an undertaking in difficulty (judgment of 18 October 2023, Ryanair v Commission (Alitalia I; COVID-19), T‑225/21, not published, EU:T:2023:644, paragraph 47).
52 Therefore, the fact that Condor is an undertaking in difficulty which has received rescue aid and restructuring aid does not prevent it from also receiving aid under Article 107(2)(b) TFEU, provided that the conditions laid down in that provision are met. Nor can that circumstance justify a different or stricter assessment of those conditions for such an undertaking.
53 However, the occurrence giving rise to the damage, as defined in the contested decision, must be the determining cause of the damage which the aid at issue is intended to remedy and must be directly responsible for causing it. A direct link exists only where the damage is the direct consequence of the occurrence in question and does not depend on the interposition of other causes. Accordingly, it is incumbent on the Commission to examine with particular care whether the occurrence was really the decisive cause of the damage suffered by the beneficiary of the aid concerned or, on the contrary, some of the damage suffered was due to the beneficiary's pre-existing difficulties (judgment of 18 October 2023, Ryanair v Commission (Alitalia I; COVID-19), T‑225/21, not published, EU:T:2023:644, paragraph 46 and the case-law cited).
54 It is in the light of those considerations that the Court must examine the evidence adduced by the applicant.
(a) The first set of evidence, concerning the compliance of the measure at issue with Article 107(2)(b) TFEU
55 The applicant relies, first, on a body of evidence relating to the absence of a direct causal link between the travel restrictions and the damage caused to Condor, second, on a body of evidence relating to the quantification of the damage, third, on evidence with regard to a risk that the aid might spill over to Condor's subsidiaries, fourth, on evidence to the effect that the Commission disregarded the competitive advantage obtained by Condor, fifth, on evidence to the effect that the amount of the aid was underestimated and, sixth, on evidence with regard to a risk of double compensation arising from the cumulation of the aid provided for by the measure at issue with the rescue aid.
56 It is apparent from the contested decision that the objective of the measure at issue is to compensate Condor for the damage suffered as a result of travel restrictions and other containment measures taken by Germany and other States during the period from 17 March to 31 December 2020 in the context of the COVID-19 pandemic. The assessment of the damage was carried out according to two separate compensation periods, on the basis of information contained in Condor's business plan drawn up in January 2020, that is to say, before the outbreak of that pandemic ('the 2020 business plan'). It was on that foundation that the Commission based the counterfactual scenario, which sought to estimate Condor's financial results in the event that the travel restrictions and other containment measures had not been adopted. First, for the period from 17 March to 30 June 2020 ('the first compensation period'), the damage was calculated by comparing Condor's actual earnings before taxes ('EBT') during that period with Condor's forecasted EBT, resulting from that plan, for that same period, which reflected the results that Condor could expect in the absence of travel restrictions and other containment measures imposed at national, European and international level. The amount of damage for that first period was estimated by the Commission at EUR 71.9 million.
57 Second, for the period from 1 July to 31 December 2020 ('the second compensation period'), the damage was assessed according to a 'route-by-route' method in order to take into consideration only routes directly affected by the restrictions imposed in the context of the COVID-19 pandemic and which were still in force during that period. The use of a different method is justified by the fact that, during that period, the restrictions imposed were not as significant as during the first compensation period and were intended to avoid the impact of other indirect factors such as the fall in demand due to uncertainty or the spread of teleworking. During that period, most of the travel restrictions between Member States or within the Schengen area were gradually lifted, even though many travel restrictions to and from third States remained in force. Accordingly, in order to establish, in the counterfactual scenario, the number of passengers directly prevented from travelling due to travel restrictions and other containment measures during the second compensation period, the method consisted of identifying the routes operated by Condor that were no longer affected by the travel restrictions or containment measures and comparing the number of passengers registered on those routes during the period in question with that provided for in the 2020 business plan. The aim was to identify as precisely as possible the number of passengers who would have travelled in the absence of the restrictions compared to the number of passengers who would not in any event have travelled, even in the absence of travel restrictions. The damage relating to the first group of passengers corresponded to Condor's costs that could be compensated, whereas the damage relating to the second group of passengers was not eligible for compensation. On the basis of that method, the Commission estimated that approximately 45% of the number of forecasted passengers would have travelled to destinations affected by travel or containment restrictions in the absence of those measures. The amount of the damage was therefore calculated, on the basis of Condor's actual and forecasted EBT over the relevant period, as the loss of revenue resulting from the difference between the number of passengers carried by Condor during the second compensation period on routes affected by travel restrictions or containment measures and the 45% of passengers that Condor could have expected to carry in the absence of those restrictions. The amount of damage for the latter period was estimated at EUR 103.414 million.
(1) The body of evidence relating to the absence of a direct causal link between the travel restrictions and the damage caused to Condor
58 The applicant submits that the Commission should have had doubts as to the existence of a direct causal link between the travel restrictions imposed in the context of the COVID-19 pandemic and the damage caused to Condor. In that regard, it puts forward six items of evidence showing, in its view, the absence of such a link.
(i) The use of an incorrect metric for the calculation of the damage
59 The applicant submits that the Commission used an incorrect metric, namely EBT, to calculate the amount of damage suffered by Condor. According to the applicant, in so far as EBT reflects, first, the undertaking's capital structure by taking into account the costs associated with the interest paid and, second, the nature of the undertaking's asset base by taking into account depreciation and amortisation, it reflects costs which increased for reasons unrelated to the COVID‑19 pandemic. It submits that any increase in interest, depreciation and amortisation costs which might have been driven by Condor's insolvency could have lowered Condor's EBT in the factual scenario and hence increased the estimated damage. Accordingly, in order to take into account the fluctuation of interest, depreciation and amortisation of an undertaking in difficulty, such as Condor, the Commission should have used another metric, namely earnings before interest, taxes, depreciation and amortisation (EBITDA), to calculate the damage. Furthermore, the use of EBITDA is regarded by the Commission itself as preferable in a document entitled 'Notification template for State aid measures notified under Article 107(2)(b) TFEU in the context of the COVID-19 outbreak'.
60 The Commission, supported by the Federal Republic of Germany and Condor, disputes that line of argument.
61 As a preliminary point, it should be noted that EBT is a metric for measuring the financial performance of an undertaking according to the formula revenue minus expenses excluding tax. EBITDA, on the other hand, excludes not only tax, but also depreciation, amortisation and interest costs.
62 It is not disputed that those two metrics are among the metrics recognised and frequently used to measure the performance of an undertaking.
63 Therefore, as the Commission submits, in so far as both EBITDA and EBT are valid and recognised metrics, the mere fact that there are several metrics to measure the performance of an undertaking does not mean that the Commission should have had doubts as to the appropriateness of the one chosen by the Federal Republic of Germany for that purpose.
64 It is therefore necessary to examine whether the applicant has succeeded in showing that, in the present case, there was specific evidence capable of giving rise to doubts as to the use of EBT.
65 The difference between EBT and EBITDA concerns, in essence, the taking into account of certain costs, namely those relating to depreciation, amortisation and interest. According to the applicant, those costs may have increased in 2020 compared to those registered in 2019 for reasons unrelated to the COVID-19 pandemic. To that end, it refers to Condor's financial statements in which it identifies certain cost elements 'which might have been driven' by the insolvency of its parent company and incurred by Condor in 2019, claiming that it is 'possible' that some of the costs relating to Thomas Cook's or Condor's insolvency were accounted for in Condor's 2020 financial results, which led to overcompensation of the damage.
66 First, those examples, in so far as they are based on Condor's results recorded in 2019, are of limited relevance, since the Commission decided not to base the counterfactual scenario on Condor's results in 2019 because those results were affected by the insolvency of Thomas Cook and therefore did not quantify the damage on the basis of those results.
67 Second, as regards the risk of overcompensation to which the applicant refers, it should be noted that its arguments to that effect are purely speculative and are not sufficiently substantiated. The applicant merely asserts that EBT 'could' reflect cost items which increased in 2020 compared to those recorded in 2019 for reasons unrelated to the COVID-19 pandemic or that it is 'possible' that some of the costs associated with Thomas Cook's or Condor's insolvency would have been accounted for in Condor's 2020 financial results. Such assertions, which are based only on mere hypotheses, are not capable of demonstrating that the Commission should have had doubts as to the use of EBT.
68 Moreover, in the present case, it is common ground that EBT was used uniformly to measure Condor's performance in both the factual and the counterfactual scenario, with the result that the costs related to interest, depreciation and amortisation were taken into account in both scenarios.
69 In any event, the applicant's arguments alleging a risk of overcompensation must be rejected as ineffective. It is apparent from Table 26 of the contested decision, from which the confidentiality of the data was lifted by the Commission in response to a written question from the Court, that, contrary to what the applicant claims, the Commission did indeed assess Condor's financial results both on the basis of EBITDA and on the basis of EBT, as regards the first compensation period. This shows a difference of EUR 0.7 million, depending on the metric used.
70 As is apparent from paragraph 222 of the contested decision, the damage caused to Condor by the travel restrictions and other containment measures, amounting to EUR 175.355 million, exceeds the amount of the aid element, which amounts to EUR 144.1 million, by EUR 31.255 million. Therefore, a difference of EUR 0.7 million in the quantification of the damage, depending on whether it is calculated on the basis of EBT or EBITDA, in no way alters the fact that the amount of the damage far exceeds the amount of the aid element, with the result that no overcompensation can result from that difference irrespective of the metric used.
71 As regards the second compensation period, while it is true that the contested decision does not contain data relating to EBITDA, there is nothing to indicate, and the applicant does not even allege, that, unlike the first compensation period, Condor's EBITDA is more than EUR 30 million lower than its EBT, with the result that the use of EBITDA would result in the amount of damage suffered by Condor during the overall compensation period being lower than that of the aid element. Even after becoming aware of the data contained in Table 26 of that decision, the applicant has failed to identify any factor capable of suggesting that Condor's depreciation, amortisation or interest costs incurred or foreseen for the second compensation period varied from those incurred or foreseen for the first compensation period to such an extent that the use of EBITDA, instead of EBT, had a decisive impact on the proportionality of the measure at issue.
72 Lastly, as regards the applicant's arguments based on the document entitled 'Notification template for State aid measures notified under Article 107(2)(b) TFEU in the context of the COVID-19 outbreak', it is sufficient to note, without it being necessary to rule on the question whether that document legally bound the Commission, that it expresses only a preference addressed to the Member States that, in their notifications, they should use EBITDA to calculate the damage. By contrast, that document does not contain any firm commitment on the part of the Commission indicating that that metric, to the exclusion of any other recognised metric, is the only one on the basis of which it will carry out its examination of the aid measures based on Article 107(2)(b) TFEU in the context of the COVID-19 pandemic.
73 Accordingly, that line of argument must be rejected.
(ii) The use of Condor's forecasted EBT for 2020
74 First, the applicant complains that the Commission based the counterfactual scenario of the calculation of the damage on the 2020 business plan, which is not realistic in so far as it was based on the assumption that Condor would be acquired by an investor, namely PGL. According to the applicant, there is, however, nothing to indicate that the failure of that sale was linked to the COVID-19 pandemic, with the result that the Commission should also have examined such a counterfactual scenario based on the failure of that sale, even in the absence of a pandemic. It considers that, in the absence of an investor, Condor's restructuring would not have been successful, leading to its liquidation and therefore the reduction of its projected profits in that counterfactual scenario.
75 In the contested decision, the counterfactual scenario used by the Commission is based on the 2020 business plan, which had been established before the COVID‑19 pandemic, with the result that it was not affected by that pandemic. According to the Commission, that plan set out the results that Condor could expect to achieve in the absence of that pandemic. It should also be noted that the Commission decided not to base the counterfactual scenario on the results achieved by Condor in 2019, since those results were affected by the insolvency of Thomas Cook, Condor having been part of that group for a large part of that year, whereas that plan was drawn up on the premiss that Condor was no longer part of it.
76 There is nothing to indicate that the Commission should have had doubts when it decided to base the counterfactual scenario on the 2020 business plan.
77 For the reasons set out in paragraph 75 above, the 2020 business plan constituted a more reliable basis for assessing the results that Condor could expect in the absence of the travel restrictions and other containment measures linked to the COVID-19 pandemic than the results actually achieved by Condor in 2019, on account of the fact that those results were affected by the insolvency of Thomas Cook. Second, as stated in the contested decision, that plan had been approved by an independent expert and by the Amtsgericht Insolvenzgericht Frankfurt am Main (Local Court having jurisdiction in insolvency matters, Frankfurt-am-Main) in the insolvency proceedings relating to Condor. Accordingly, the Commission was entitled to consider, without having any doubts, that the information contained in that plan was reliable.
78 Moreover, as the Commission rightly submits, several factors prevailing at the material time made it possible to envisage the sale of Condor in the absence of the adverse effects caused by the COVID-19 pandemic, in particular, in the air transport sector. Condor was an inherently sound undertaking whose financial results were negatively affected by the difficulties of its parent company. That has been established by the Amtsgericht Insolvenzgericht Frankfurt am Main (Local Court having jurisdiction in insolvency matters, Frankfurt-am-Main) and by the Commission in earlier decisions, in particular the decision on rescue aid, which forms part of the context in which the contested decision was adopted. It is apparent from the latter decision that Condor's financial results taken in isolation were positive before that pandemic, which led that national court to conclude that Condor's need for restructuring was not due to shortcomings in its business model, but to the insolvency of Thomas Cook. In addition, although the sale of Condor to PGL did not ultimately take place, the fact remains that several other purchase offers had been submitted, which the applicant does not dispute. This tends to show that, prior to the outbreak of that pandemic, several investors had expressed an interest in purchasing Condor.
79 In the light of those factors, the counterfactual scenario used by the Commission, based on the 2020 business plan, which foresaw, inter alia, that Condor would be purchased in 2020 by an investor, was a plausible scenario on which the Commission could rely without having any doubts.
80 In any event, the applicant does not demonstrate that the counterfactual scenario which it advocates, namely a scenario in which Condor would not have found any investor, even in the absence of the COVID-19 pandemic, would necessarily have resulted in its liquidation.
81 Second, the applicant complains that the Commission failed to 'independently' verify the 2020 business plan. In that regard, it is sufficient to note, as has been stated in paragraph 77 above, that that plan was approved, first, by an independent expert and, second, by the Amtsgericht Insolvenzgericht Frankfurt am Main (Local Court having jurisdiction in insolvency matters, Frankfurt-am-Main), with the result that the Commission could, without having any doubts, consider that the information contained in that plan was reliable.
82 Third, the applicant submits that the forecasts in the 2020 business plan were close to Condor's results recorded in 2019, so that the Commission assumed that Condor would have achieved almost the same revenues and expenses in 2020 as in 2019, which is an unrealistic assumption. In that regard, the applicant refers to paragraph 66 of the contested decision, in which it is stated that, in March 2020, the number of passengers carried by Condor fell by almost 50%, both compared to the same period in 2019 and compared to the forecasts made before the COVID‑19 pandemic. It also illustrates that argument by the fact that Condor's EBT deteriorated and was negative in each financial year between 2016 and 2019, which suggests that its EBT deteriorated further in 2020 compared to that measured in 2019.
83 In that regard, in so far as the applicant's argument that the Commission unrealistically assumed that Condor would have achieved almost the same revenues and expenses in 2020 as in 2019 is based on paragraph 66 of the contested decision, it must be stated that that paragraph relates to the total number of passengers carried by Condor, and not to all of Condor's costs and revenues. In addition, it should be borne in mind that, as stated in paragraph 78 above, Condor was an inherently sound undertaking, the isolated results of which showed that it was profitable. Accordingly, the applicant is wrong to claim that it was unrealistic to expect that the number of passengers carried by Condor as provided for in the 2020 business plan would be close to that of 2019.
84 As regards Condor's costs and revenues provided for in the 2020 business plan, as compared with those recorded in 2019, it should be noted, as the Commission did, that, contrary to what the applicant claims, the data in Tables 27 and 29 of the contested decision show that that plan actually provided for lower results than those recorded in 2019. Accordingly, that plan reflects a conservative approach by providing for a certain deterioration in the results of Condor's EBT in 2020. Consequently, the applicant's argument has no factual basis.
85 The applicant's line of argument must therefore be rejected.
(iii) The distinction between the damage suffered by Condor as a result of the imposition of travel restrictions linked to the COVID-19 pandemic and the losses due to its pre-existing difficulties
86 The applicant submits that the contested decision does not distinguish between, on the one hand, the damage caused by the imposition of travel restrictions and other containment measures in the context of the COVID-19 pandemic and, on the other hand, losses due to Condor's pre-existing difficulties. According to the applicant, the Commission failed to ensure that the restructuring aid and the measure at issue did not compensate the same costs twice.
87 In the first place, as regards Condor's revenue, the applicant notes a fluctuation and deterioration of Condor's EBT during the 2015 to 2019 period due to the 'uncertain situation' of Thomas Cook, with the result that it would have been difficult to predict Condor's future results for 2020 precisely. Accordingly, it reiterates its argument that the Commission should have 'independently' examined the plausibility of the 2020 business plan.
88 In that regard, first, and as the applicant itself acknowledges, Condor's results during the 2015 to 2019 period were heavily affected by the fact that it belonged to Thomas Cook. That fact therefore seems rather to demonstrate that the Commission's approach of not using those data left no room for doubt as to the most appropriate basis for the counterfactual scenario.
89 In addition and in any event, Condor's results, recorded during the 2015 to 2019 period and listed by the applicant, do not demonstrate the existence of a clear downward trend, which would have justified results that were even more negative than those set out in the 2020 business plan. It is apparent from those data that Condor's financial results were not steadily declining, but sometimes showed decreases and at other times increases, depending on the year.
90 Similarly, in so far as the applicant claims that those fluctuations should have led the Commission to 'independently' examine the forecasts contained in the 2020 business plan, that argument must be rejected for the same reasons as those set out in paragraph 81 above.
91 Second, the applicant submits in the reply, in essence, that a forward-looking business plan must be based on financial results covering a period of at least three to five years, which demonstrates the relevance of Condor's data for the 2015 to 2019 period. However, it should be noted, as the Commission did, that, in the circumstances of the present case, characterised by the fact that the beneficiary experienced drastic changes brought about by the bankruptcy of its parent company and the termination of its membership of the Thomas Cook group during the year preceding the outbreak of the COVID-19 pandemic, the 2020 business plan could be used as a basis for the counterfactual scenario. In addition, the Commission rightly submits that the analysis for calculating the damage suffered by Condor consists of examining its situation just before the occurrence of that pandemic, in order to determine the results that it could have achieved in the absence of that pandemic, with the result that data dating back several years are not directly relevant in that regard. Accordingly, the applicant's arguments to that effect must be rejected.
92 In the second place, the applicant submits that several costs foreseen in the counterfactual scenario are due to Condor's pre-existing difficulties.
93 First, the applicant complains that the Commission failed to take into account the increasing maintenance costs of Condor's ageing fleet between 2019 and 2020. It refers in that regard to a 2006 RAND Corporation study entitled 'The Maintenance Costs of Aging Aircraft' ('the RAND study'). In the reply, it refers to a publication by the International Air Transport Association (IATA), which indicates that maintenance costs are generally higher for older aircraft.
94 In that regard, it should be noted that the RAND study dates from 2006 and is based on data from only four airlines active on the North American market, for the period from 1965 to 1997. Therefore, given the age and geographical scope of the study, its probative value for the purposes of determining whether Condor's fleet maintenance costs would have increased in the absence of travel restrictions can only be limited (see, to that effect, judgment of 18 October 2023, Wizz Air Hungary v Commission (TAROM; COVID-19), T‑332/21, not published, EU:T:2023:645, paragraph 67).
95 Moreover, it should be noted that, according to the RAND study, in the case of aircraft more than 12 years old, maintenance costs increase only slightly, namely by 0.7%, during each additional year of their useful life. Consequently, in view of the fact that, according to the information provided by the applicant, the average age of Condor's fleet was 19.3 years, it cannot be concluded, on the basis of that study, that Condor's fleet maintenance costs changed significantly in 2020 compared to 2019 (see, to that effect, judgment of 18 October 2023, Wizz Air Hungary v Commission (TAROM; COVID-19), T‑332/21, not published, EU:T:2023:645, paragraph 68).
96 As regards IATA's publication, that does indeed indicate that maintenance costs increase with the age of the aircraft. However, it also follows that 'in order to accurately assess the evolution of the maintenance costs over the life of the aircraft, consistent data over a span of at least two decades would be required from multiple operators in multiple global regions' and that, in essence, it was difficult, in 2018, to calculate the increase in maintenance costs because at that date there was no established method for doing so. Accordingly, that publication does not demonstrate that Condor's fleet maintenance costs would have increased significantly between 2019 and 2020, which would have justified a cost adjustment in the counterfactual scenario. The evidence adduced by the applicant shows at most that the maintenance costs of an ageing fleet are difficult to predict.
97 Second, the applicant complains that the Commission failed to verify whether Condor's EBT in the factual scenario took into account one-off or extraordinary costs arising from Condor's pre-existing difficulties. It refers to Condor's 2020 financial statements, which show 'impairment losses on inventories' amounting to EUR 26.9 million during the period from 1 December 2019 to 30 November 2020, which should have been excluded from the calculation of the damage.
98 In reply to a written question from the Court, the Commission stated that the expense identified by the applicant corresponded to the cumulative amount of various 'bad debts' incurred during the period from 1 December 2019 to 30 November 2020. According to the Commission, those debts were held by Condor and were no longer recoverable because the debtors were unable to pay. As those debts could not be recovered, Condor had to write them down in its financial statements. In order to substantiate that evidence, the Commission produced an unredacted version of Tables 26 and 28 of the contested decision, pointing out that no one-off expense amounting to EUR 26.9 million appeared in those tables and that, more generally, over the first compensation period, no expense was greater than that amount.
99 Accordingly, it must be held, as the Commission did, that it is not apparent from Tables 26 and 28 of the contested decision or from any other material in the file that the damage taken into account in the factual scenario included a one-off expense amounting to EUR 26.9 million.
100 Furthermore, the mere fact that the contested decision does not explicitly state that Condor did not bear one-off or extraordinary costs during the compensation period is not such as to substantiate the applicant's argument (see, to that effect, judgment of 6 November 2024, Wizz Air Hungary v Commission (TAROM II; COVID-19), T‑827/22, not published, EU:T:2024:784, paragraph 94).
101 Third, the applicant submits that the Commission should have taken into account, in the counterfactual scenario, the additional costs generated by the restructuring measures that Condor was to put in place. According to the applicant, the decision on restructuring aid stated that 'transformation measures' were necessary, in particular a renewal of Condor's long-haul fleet, so that, in the absence of the COVID-19 pandemic, Condor would have implemented those measures, which would have resulted in additional costs associated with the acquisition of new aircraft.
102 That argument is unfounded. The applicant has not shown that such costs, in particular those linked to the renewal of Condor's fleet, would have been incurred during the overall compensation period in the absence of the COVID-19 pandemic. On the contrary, it is apparent from the decision on restructuring aid that such an eventuality was rather unlikely, in so far as the renewal of the fleet was not foreseen for several years following the adoption of that decision.
103 In the reply, the applicant refers to other costs associated with restructuring measures, concerning 'staff, [contracts] and [processes]', which consist, inter alia, of severance pay. However, those arguments remain too general to permit a finding that the Commission should have had doubts as to the plausibility of the counterfactual scenario.
104 In the light of those factors, the applicant's line of argument must be rejected.
(iv) The failure to take account of certain external factors
105 The applicant submits that the 2020 business plan, and therefore the counterfactual scenario, does not sufficiently take into account several external risks that could affect Condor's projected performance.
106 First, the applicant submits that fuel costs vary significantly from year to year and, therefore, that the Commission could not assume that those costs would remain stable between 2019 and 2020. On the contrary, in the applicant's submission, an increase in jet fuel prices in 2020 compared with 2019 was to be expected. In that regard, it refers to data showing changes in the prices of jet fuel and crude oil during the period from June 2014 to June 2021. The applicant also relies on the forecasts of the Energy Information Administration (United States) of January 2020, according to which fuel prices were to increase by 4.2% in 2020 compared with 2019.
107 However, the evidence referred to in paragraph 106 above tends, in reality, rather to show that there was no certainty as to how the price of jet fuel would change during the period concerned. It is apparent from the data to which the applicant refers, first, that the price of fuel fluctuated significantly during the period from June 2014 to June 2021, experiencing sharp increases and decreases at short intervals and, second, that that price was significantly higher in 2019 than in 2020, which contradicts the applicant's claim, based in particular on the Energy Information Administration's forecasts, that it was to be expected that the price of jet fuel would increase in 2020 compared to 2019. Furthermore, in view of the highly volatile nature of those prices, as shown by the data submitted by the applicant itself, the Commission cannot be criticised for having failed to anticipate how they would change (see, to that effect, judgment of 6 November 2024, Wizz Air Hungary v Commission (TAROM II; COVID-19), T‑827/22, not published, EU:T:2024:784, paragraph 74 and the case-law cited).
108 Second, the applicant bases its argument on changes in interest and exchange rates, increased competition, decline in the charter airline market and other environmental, economic and political risks such as Brexit.
109 However, the applicant does not specifically demonstrate what impact those factors would have had on the calculation of the damage.
110 As regards changes in interest and exchange rates, the applicant merely refers to Condor's financial statements, from which it is indeed apparent that 'Condor is exposed to interest rate [and] exchange rate risks'. However, it is also apparent, in essence, that the risk of an increase in interest rates is limited, since those applicable to KfW loans are fixed and that, for the rest, 'financial instruments are used to limit those risks'. In addition, those findings are mere general observations contained in an introductory section, which lists all the financial risks that may arise. They do not therefore demonstrate that it would be reasonable to expect that interest and exchange rates, either generally or Condor's specific rates, would fluctuate unusually in 2020.
111 Moreover, as regards the intensification in competition, the alleged decline in the charter airline market and other environmental, economic and political risks such as Brexit, it should be noted, as the Commission did, that the applicant does not explain how the Commission could have taken such risks into account by quantifying them. That argument is therefore insufficiently substantiated and too speculative to succeed (see, to that effect, judgment of 6 November 2024, Wizz Air Hungary v Commission (TAROM II; COVID-19), T‑827/22, not published, EU:T:2024:784, paragraph 76 and the case-law cited). In any event, as regards the argument based on the 'industry-wide difficulties' of charter airlines, the applicant merely refers to studies indicating that those airlines have been performing poorly for several years because of competition from low-cost airlines. However, although the articles and studies cited by the applicant in its written pleadings do indeed appear to illustrate difficulties on the charter airline market in Europe, those factors do not call into question the finding in the contested decision. The situation of the other charter airlines is of little relevance, since, as stated in paragraph 78 above, Condor was, irrespective of its relationship with Thomas Cook, an inherently sound undertaking.
112 Third, by an argument alleging a deterioration in Condor's financial results, the applicant puts forward, in essence, factors identical to those analysed in paragraphs 78 and 89 to 91 above, with the result that it must be rejected for the same reasons as those set out in those paragraphs.
113 In the light of those factors, the applicant's line of argument must be rejected.
(v) The cut-off date between the compensation periods
114 The applicant disputes the cut-off date set by the Commission between the first compensation period and the second compensation period, namely 30 June 2020. According to the applicant, that date is not justified, since Germany had lifted its travel restriction measures between 15 and 30 June 2020. Therefore, in so far as the restrictions during those 15 days were only partial, it cannot be ruled out that part of the damage suffered by Condor between 15 and 30 June 2020 may not be directly attributable to those restrictions.
115 First, as regards, in particular, the restrictions imposed by Germany, the Commission stated, in paragraphs 37 to 44 of the contested decision, that the German authorities had adopted various measures between 17 March and 15 June 2020 aimed at curbing the spread of the COVID-19 pandemic, which included, inter alia, a worldwide formal travel warning, as regards non-essential travel from Germany. That warning was described by those authorities as the sharpest measure available to them to limit travel, in so far as an outright travel ban was not permitted under German constitutional law. That warning was lifted from 15 June 2020 in respect of journeys to the Member States, the Member States of the Schengen area and the United Kingdom, in order to be replaced by individual warnings detailing the health situation of each country concerned. By contrast, the general formal warning to travellers was maintained beyond 30 June 2020 in respect of journeys to States other than Switzerland, the United Kingdom and the Member States of the European Economic Area.
116 Similarly, as regards journeys to Germany from non-Schengen Member States, the German authorities introduced, on 17 March 2020, entry restrictions for the whole of the first compensation period, which remained applicable until 30 June 2020.
117 Second, in paragraphs 45 to 50 of the contested decision, the Commission noted that the authorities of other Member States and of third States, to or from which Condor operated routes, had also adopted various measures during the first compensation period. Some of those measures applied until the end of that period, while others were lifted earlier.
118 It is apparent from those factors, which are not disputed by the applicant, that the travel restrictions to and from third countries imposed by Germany remained in force until at least 30 June 2020. Similar restrictions existed with regard to the Member States, the Schengen Member States and the United Kingdom until 15 June 2020.
119 Consequently, 62% of the routes operated by Condor were still affected by such restrictions between 15 and 30 June 2020, it being noted that those routes represented 84% of Condor's revenues in 2019 and 86% of its forecasted revenues for 2020 in the absence of the COVID-19 pandemic.
120 It is apparent from the contested decision that those restrictions had a very significant impact on Condor's operations throughout the first compensation period, despite the gradual lifting of certain restrictions from 15 June 2020. As the Commission noted, between 15 and 30 June 2020, Condor's operations were far from having resumed and the partial lifting of certain restrictions did not start to have an impact on its operations until July 2020. That is apparent in particular from Tables 13 to 19 of the contested decision, by which the Commission specifically examined the effect of the restrictions on Condor between 15 and 30 June 2020. It follows that the number of passengers carried by Condor on those dates represented only 1% of the expected number in the absence of the COVID‑19 pandemic. Similarly, Condor's revenue from the sale of airline tickets was, over the same period, 99% lower than that in 2019 and 97% lower than that provided for in the 2020 business plan.
121 In addition, the negative effects of the travel restrictions linked to the COVID-19 pandemic for the first compensation period continued for some time after they had been formally lifted as regards certain destinations, due to the existence of a necessary ramp-up period immediately following that lifting. Thus, the formal lifting of a restriction on a given route does not result in an immediate resumption of flights. As the Commission rightly points out, airlines must, after the partial lifting of restrictions, readjust their schedules and staff and reposition their flights on reopened routes. Moreover, as it also argues, travellers themselves must also have sufficient notice to plan their trips (judgment of 18 October 2023, Wizz Air Hungary v Commission (TAROM; COVID-19), T‑332/21, not published, EU:T:2023:645, paragraph 107).
122 It follows that the applicant has not shown that the Commission should have had doubts as to the cut-off date between the compensation periods, namely 30 June 2020.
123 That finding is not affected by the applicant's other arguments.
124 First, as regards the applicant's argument that the lifting of the restrictions had been announced several weeks in advance, it should be noted that it is apparent from the press articles which it cites that passengers were also warned that those restrictions could be reintroduced in the event of a resurgence of COVID-19 cases. Moreover, one of those articles refers to the fact that, although certain travel restrictions could be lifted on 15 June 2020, the recommendations replacing them could still be very strict and that travelling would still be strongly discouraged.
125 Second, as regards the applicant's complaint that the Commission assumed, without however proving it, that the ramp-up period would last for the entire second part of June 2020, it is sufficient to refer to paragraphs 115 to 120 above, from which it is apparent that the Commission substantiated the cut-off date between the compensation periods with specific, verifiable and consistent evidence.
126 Third, the applicant complains that the Commission failed to explain why, between 15 and 30 June 2020, although the restrictions were only partial, the effect on Condor was as restrictive as during the period between 17 March and 15 June 2020. That argument cannot succeed in the light of the facts cited in paragraphs 115 to 120 above.
127 In the light of those factors, the applicant's line of argument must be rejected.
(vi) The amount of the damage suffered by Condor during the second compensation period
128 According to the applicant, by adopting the 'route-by-route' method summarised in paragraph 57 above, the Commission wrongly relied on the available data covering only the period from 1 July to 31 October 2020 instead of taking into consideration all the data relating to the second compensation period, running until 31 December 2020. In that regard, although it acknowledges that new restrictions were imposed from the end of October 2020, it criticises the Commission for not having indicated how those restrictions differed from those already in force between 1 July and 31 October 2020. It adds that 'it is likely that at least some routes operated by Condor were not subject to travel restrictions over the period from 1 November 2020 to 31 December 2020' and that those routes should have been included in the calculation of the number of passengers who did not actually travel during the latter period for reasons not directly linked to the travel restrictions.
129 In the present case, as is apparent from the contested decision, the counterfactual scenario for the second compensation period was based on the number of passengers on flights not affected by the travel restrictions implemented during the period from 1 July to 31 October 2020. As regards the period from 1 November to 31 December 2020, the Commission explained that it was not possible to identify a sufficient number of flights on routes for which no travel restriction was in force. As the Commission submits, without being challenged on that point by the applicant, it is apparent from Table 1 of the contested decision that the German Government had issued formal travel warnings for almost all the third States to which Condor operated flights during the second compensation period. In addition, all the routes operated by Condor from third countries were subject to a ban on entering German territory during that period, although some of those bans could have been temporarily lifted depending on the evolution of the epidemic in a given country. Similarly, in November and December 2020, numerous routes operated by Condor to Member States were the subject of a warning on non-essential travel by the German Government (Table 2 of the contested decision). The Commission states in the defence that this corresponds to all of Condor's routes within the European Union. Those data are not contested by the applicant.
130 It follows that, between 1 November and 31 December 2020, almost all of the routes operated by Condor were affected by travel restrictions, with the result that the data relating to that period were not sufficiently representative of the number of passengers who would have travelled in the absence of those restrictions. Accordingly, in order to take into account a sufficiently representative sample of flights not affected by those restrictions, the Commission could, without having any doubts, base its assessment on the flights operated between 1 July and 31 October 2020.
131 The applicant has failed to demonstrate that there were reliable and sufficiently representative data relating to routes operated by Condor and free from travel restrictions during November and December 2020. Although the applicant refers, in general terms, to the potential existence of routes that were operated by Condor during those two months, the fact remains that it is apparent from the facts set out in paragraphs 129 and 130 above that those routes are extremely limited in number and do not constitute a sufficiently representative sample, unlike the lot of more than 8 650 flights operated by Condor during the period between 1 July and 30 October 2020 on which the Commission's assessment was based.
132 In the reply, the applicant disputes the Commission's assertion that it was necessary for it to 'rely on a period that [was] not vitiated by the accelerated rise in the number of COVID-19 infection rates deterring passengers sensitive to the risks of activation of travel restrictions and containment measures to travel, as it was the case for the period November-December 2020', thus claiming that such an approach refers to an indirect causal link with the travel restrictions and containment measures.
133 Without it being necessary to rule on the admissibility of that argument put forward by the applicant, which is called into question by the Commission, it is sufficient to note that the method adopted by the Commission and summarised in paragraph 57 above was specifically intended to exclude the number of passengers who would not have taken the flight even in the absence of the travel restrictions, since they were deterred for other reasons indirectly linked to the COVID-19 pandemic, such as the general state of concern associated with journeys made in a volatile health context of a pandemic. The causal link between the damage caused by the loss of revenue resulting from the decision of those passengers not to travel and the travel restrictions is only indirect. That method is therefore precisely intended to ensure the direct link between the damage and the travel restrictions linked to that pandemic. However, for that method to be reliable, it must be based on a sufficiently representative sample of flights not affected by such restrictions.
134 As has been found in paragraphs 129 and 130 above, the fact that there were, in isolation, some unaffected flights between 1 November and 31 December 2020 is not sufficient to demonstrate that those flights had to be included in the sample selected by the Commission.
135 The applicant's line of argument must therefore be rejected.
(2) The body of evidence relating to the quantification of the damage
136 The applicant relies on three items of evidence seeking to demonstrate that the Commission should have had doubts as to the quantification of the damage suffered by Condor, alleging, first, that the Commission failed to have regard to the effects of the COVID-19 pandemic on the prospect of selling Condor, second, that there were no measures to ensure that Condor had reduced its costs and, third, failure to assess the damage caused to other airlines.
(i) The Commission's failure to take account of the effects of the COVID-19 pandemic on the prospect of selling Condor
137 The applicant claims, in essence, that the Commission should have had doubts as to the determination of the amount of aid arising from tranche A of loan 1 and loan 2. According to the applicant, that amount does not correspond to a 1 000 basis point IBOR rate, as used by the Commission, but to the nominal amount of those loans, since Condor was unable to find any financing on the market. It submits that it was not realistic to expect Condor to be sold in mid-2022 at the same price as that agreed at the time of the failed sale in 2020, given the impact of the COVID-19 pandemic.
138 In that regard, it should be noted that those arguments do not relate to the quantification of the damage, but to the assessment of the amount of the aid. Accordingly, they will be examined in paragraphs 155 to 170 below.
(ii) The Commission's failure to verify whether Condor mitigated costs
139 The applicant submits that the Commission failed to verify whether Condor had taken reasonable measures to limit the extent of the damage suffered. According to the applicant, although the Commission took into account Condor's 'avoided costs', it failed to take into account the 'avoidable costs', that is to say, the costs that it could have avoided but did not.
140 In the present case, it is apparent from the contested decision that, in order to avoid overcompensation, the Commission deducted from the damage suffered by Condor the costs which Condor avoided as a result of the travel restrictions linked to the COVID-19 pandemic. Accordingly, the assessment of the damage takes account, as is apparent from paragraph 110 of that decision, both of the additional costs caused by those restrictions and of the costs avoided as a result of those restrictions. In that regard, the Commission assessed both the positive and negative impact of those restrictions on Condor's variable costs, in particular fuel costs, fees and charges, maintenance costs, IATA commissions and fixed costs, in particular the reduction of staff and marketing costs, and the costs related to the grounding of aircraft.
141 The Commission defined the avoided costs as those that Condor would have incurred during the relevant period if its activities had not been affected by the travel restrictions and containment measures linked to the COVID-19 pandemic and which Condor would not have had to bear because of those restrictions.
142 Although the applicant does not dispute either the principle of deducting avoided costs or the parameters thereof, it submits that, in addition to those avoided costs, the Commission should also have deducted the 'avoidable' costs, that is to say, the costs that Condor could have further avoided or reduced, in order to mitigate the impact of the COVID-19 pandemic.
143 In that regard, it has been held that only aid that is in excess of the damage incurred by its beneficiaries does not fall within the scope of Article 107(2)(b) TFEU. Although the measure at issue must not bring about an improvement in Condor's financial situation going beyond what is necessary to attain the aim provided for in Article 107(2)(b) TFEU, that provision does not require a 'maximum mitigation of costs' by the beneficiary (see, to that effect, judgment of 6 November 2024, Wizz Air Hungary v Commission (TAROM II; COVID-19), T‑827/22, not published, EU:T:2024:784, paragraph 85 and the case-law cited).
144 Nor may the applicant validly rely on the judgment of 19 May 1992, Mulder and Others v Council and Commission (C‑104/89 and C‑37/90, EU:C:1992:217), in merely, in essence, expressing doubt that Condor had spontaneously committed to mitigating the damage that it suffered. The applicant's arguments are general and it adduces no specific evidence showing that Condor displayed a lack of diligence (see, to that effect, judgment of 6 November 2024, Wizz Air Hungary v Commission (TAROM II; COVID-19), T‑827/22, not published, EU:T:2024:784, paragraph 90).
145 It follows from the foregoing that the applicant's line of argument must be rejected.
(iii) The Commission's failure to take account of the damage caused by the COVID-19 pandemic to other airlines
146 In the application, the applicant claimed, in essence, that the Commission should have assessed the damage caused by the COVID-19 pandemic to airlines other than Condor. However, in response to a written question from the Court, the applicant withdrew that argument.
(3) The risk of aid leaking to Condor's subsidiaries
147 The applicant submits that the aid to Condor was likely to benefit the entire 'Condor group' and that the Commission could not exclude that possibility a priori. It also submits that the Commission failed to examine the nature of the contractual obligations and rights incumbent on Condor and its subsidiaries and the possible existence of a mechanism to prevent the aid granted to Condor from benefiting other entities in that group.
148 In the present case, it is apparent from paragraphs 1 and 100 to 102 of the contested decision that the beneficiary of the aid is 'Condor Flugdienst GmbH', the sole shareholder of which is 'SG Luftfahrt GmbH' ('SGL'), a financial holding company with no operational activities. SGL has held Condor's shares since it emerged from the insolvency proceedings in December 2020, with the sole aim of selling the company. According to that decision, Condor is not part of the Noerr group (through Team Treuhand GmbH or Noerr & Stiefenhofer), since SGL acts as a shareholder established for the sole purpose of restructuring Condor.
149 The applicant does not dispute those factors.
150 Accordingly, the applicant has not shown that the Commission should have had doubts as to whether the measure at issue might benefit SGL or the Noerr group, cited in the contested decision.
151 In so far as, by its line of argument, the applicant refers to Condor's 'subsidiaries', its arguments are abstract and are not supported by tangible evidence enabling the Court to assess their merits.
152 The applicant's line of argument must therefore be rejected.
(4) The Commission's failure to take account of the competitive advantage obtained by Condor
153 The applicant claims that the Commission underestimated the value of the advantage granted to Condor by disregarding the competitive advantage it obtained as a result of the measure at issue, which results in the strengthening of its competitive position on the market.
154 However, in response to a written question from the Court, the applicant withdrew that argument.
(5) The underestimation of the amount of the aid
155 In the first place, the applicant reiterates its arguments, summarised in paragraph 137 above, that, assuming that the sale of Condor would have taken place in mid-2022 at the same price as that obtained in 2020, the Commission underestimated the amount of the aid.
156 In the present case, in the contested decision, the Commission acknowledged that repayment of the loans was risky, since it depended heavily on the timing and price of the sale of Condor and the cash flows generated. In that regard, it found that the amount of aid had to be assessed on the basis of the assumption that Condor would be sold in mid-2022. It split its assessment into tranches, taking into consideration the different seniority of loan 2 and tranches A and B of loan 1 and stating that, in the event of sale, loan 2 would be repaid first, followed by tranche A of loan 1 and then by tranche B of loan 1.
157 Next, the Commission stated that a sale price similar to that obtained in January 2020 would be sufficient to repay tranche A of loan 1, and loan 2, and would also ensure a buffer of several million euro. According to the Commission, it was realistic to expect that Condor's sale price in mid-2022 would be similar to that obtained in January 2020 on the ground, first, that the price obtained in January 2020 had been obtained within a short time frame of six months, in the context of an open tender procedure and, second, that that price had been offered for an undertaking in insolvency proceedings. However, at the time of the new sale, the process would be longer and Condor would have left the insolvency proceedings. Thus, it considered that the probability of repayment of loan 2 and of tranche A of loan 1 could be regarded as sufficiently high, with the result that it determined the aid element as being the amount corresponding to a 1000 basis point IBOR rate, namely the rate provided for an undertaking with low collateral and in poor financial condition. That amount corresponded, in its view, to the highest rate provided for in its Communication on the revision of the method for setting the reference and discount rates (OJ 2008 C 14, p. 6). As regards tranche B of loan 1, the aid element was set as the nominal amount of the loan on account of the fact that it had low seniority and that it was unlikely that the sale price of Condor would be sufficient to cover it.
158 The Commission also stated that, as regards tranche A of loan 1, and loan 2, it had to carry out its examination on the basis of the situation as it stood on the date of adoption of the earlier decision, namely 26 April 2020, which the applicant does not dispute.
159 It is therefore necessary to determine whether, on 26 April 2020, the Commission could, without having any doubts, consider the prospect of a sale of Condor in mid-2022 at a price sufficient to repay tranche A of loan 1, and loan 2, to be plausible.
160 The Commission was therefore required to carry out a prospective analysis that was necessarily based on assumptions.
161 In that regard, the Commission took account of a body of coherent and consistent evidence capable of indicating that the assumptions envisaged were plausible.
162 First, as the Commission found in the decision on rescue aid, and as recalled in paragraph 78 above, Condor was, taken individually, a sound and viable undertaking whose difficulties were linked to those of its parent company and were therefore not intrinsic to it. The Commission could therefore expect the investors to express an interest in its purchase.
163 Second, as the Commission correctly points out in the contested decision, at the time of the attempted sale in 2020 Condor was in insolvency proceedings and the period for the sale was short. By contrast, the new sales process, planned for 2022, would take place over a longer period of time and Condor would then have left the insolvency proceedings.
164 Third, it is apparent from the contested decision that the prospect of a sale of Condor at a price similar to that obtained in January 2020 would make it possible not only to repay loan 2 and tranche A of loan 1, but also to ensure an additional buffer of several million euro. Accordingly, the prospect of that repayment would remain plausible even if the sale price had been lower than that obtained in January 2020.
165 Fourth, it is also apparent from the contested decision that there were collaterals for tranches A and B of loan 1 and that those collaterals would be used first for tranche A and then for tranche B.
166 On the basis of that body of evidence, the Commission could, without having any doubts, consider that the prospect of selling Condor in mid-2022 at a price sufficient to repay loan 2 and tranche A of loan 1 was plausible and that, therefore, the amount of the aid had to be calculated on the basis of a 1000 basis points IBOR interest rate on those loans.
167 Furthermore, the applicant is wrong to claim that the Commission failed to take into account the negative impact of the COVID-19 pandemic on the prospect of selling Condor at a price comparable to that obtained in January 2020. In that regard, the Commission considered that that pandemic would delay Condor's sale to mid-2022. Such a timetable was justified, according to the applicant, by the fact that it expected in April 2020, that is to say, at the very beginning of the outbreak of the pandemic, that its negative effects would diminish towards mid-2022. There is nothing to indicate that, at the material time, such a prospect was implausible.
168 Similarly, the applicant's references to various studies which show that many airlines lost value following the COVID-19 pandemic are irrelevant, since those studies do not concern Condor's specific situation. As noted by the Commission, since it was an inherently sound undertaking, it was plausible to foresee that it would, towards mid-2022, when the negative effects of the COVID-19 pandemic on the aviation sector had diminished, have restored its value to that from before the outbreak of that pandemic.
169 Moreover, as is apparent from the decision on restructuring aid, Condor was sold in May 2021, which confirms, although ex post factum, the plausibility of the forecasts made by the Commission.
170 The applicant's arguments must therefore be rejected.
171 In the second place, the applicant complains that the Commission failed to examine further the two other estimates of the amount of aid submitted by the German authorities.
172 In the present case, when notifying the measure at issue, the Federal Republic of Germany had submitted three estimates of the amount of the aid at issue. The first estimate is the one used by the Commission to calculate the amount of aid. As regards the second estimate, it is apparent from the contested decision that it did not reveal any aid element, whereas, according to the third estimate, the aid element was lower than that resulting from the first estimate. The Commission also found that the second and third estimates were based on a software tool, but that, since it did not have sufficient information on the underlying parameters of that tool, it had not been able to reconcile or comment on those estimates.
173 Accordingly, the applicant's complaint must be rejected as ineffective. In using the first estimate, which included the highest aid element, the Commission relied on the less favourable assumption for Condor.
(6) The risk of double compensation arising from the cumulation of the aid provided for by the measure at issue with the rescue aid
174 The applicant submits that the Commission failed to take into consideration the rescue aid previously granted to Condor, which covered a period of six months from 16 September 2019 to 3 April 2020, and which therefore overlapped in part with the first compensation period, namely between 17 March and 3 April 2020. It criticises the Commission for merely stating that the Federal Republic of Germany had undertaken not to cumulate the measure at issue with other aid covering the same eligible costs, without attempting to ensure that there would be no double compensation.
175 As recalled in paragraph 51 above, the FEU Treaty does not preclude a concurrent application of Article 107(2)(b) and Article 107(3)(c) TFEU, provided that the conditions of each of those two provisions are met.
176 By judgment of 18 May 2022, Ryanair v Commission (Condor; rescue aid) (T‑577/20, EU:T:2022:301), which has become final, the Court held that the conditions for granting rescue aid had been met and dismissed the applicant's action against the decision on rescue aid.
177 As regards the measure at issue, according to settled case-law, when the Commission examines the compatibility of State aid with the internal market, it must take account of all the relevant factors in the case in question (see, to that effect, judgments of 18 January 2012, Djebel – SGPS v Commission, T‑422/07, not published, EU:T:2012:11, paragraph 171 and the case-law cited, and of 27 February 2013, Nitrogénművek Vegyipari v Commission, T‑387/11, not published, EU:T:2013:98, paragraph 126).
178 It is therefore necessary to examine whether the rescue aid was a relevant factor for the assessment of the compatibility of the measure at issue with the internal market.
179 In that regard, it should be noted that the rescue aid and the measure at issue had different purposes and pursued different objectives, with the result that they were intended to cover different costs. The objective of that measure was to compensate Condor for the damage suffered as a result of travel restrictions or containment measures adopted in response to the COVID-19 pandemic, that damage having been calculated in accordance with the method described in paragraphs 56 and 57 above. By contrast, the rescue aid, granted before the outbreak of that pandemic, had a completely different purpose and objective, namely to provide the latter with the liquidity it needed to cover its operating costs and to ensure its survival following the insolvency of Thomas Cook for a limited period of six months during which it had to prepare for its restructuring.
180 Accordingly, the applicant has not demonstrated, with supporting evidence, that the rescue aid had an actual impact on the calculation of the damage which the measure at issue was intended to compensate. In particular, it has failed to demonstrate specifically what costs were compensated twice by both the rescue aid and that measure, with the result that it should have been excluded from the amount of the damages granted by that measure. The mere fact that there is a slight overlap between the period covered by the rescue aid and the first compensation period is not sufficient to demonstrate that the Commission should have had doubts as to the existence of a risk of double compensation, since those two aid measures are intended to cover costs of different origin.
181 That line of argument must be rejected, as must, consequently, the first set of evidence in its entirety.
(b) The second set of evidence, with regard to a breach of the general principles of non-discrimination, proportionality, freedom to provide services and freedom of establishment
182 The applicant submits, in essence, that the Commission should have had doubts as to whether the measure at issue was compatible with the internal market in so far as that measure is in breach, first, of the principles of non-discrimination and proportionality and, second, of the principles of freedom to provide services and freedom of establishment in that it benefits only Condor.
183 The Commission, supported by the Federal Republic of Germany and Condor, disputes the applicant's arguments.
(1) Breach of the principles of non-discrimination and proportionality
184 The applicant submits, in essence, that the contested decision allows discriminatory treatment which is neither appropriate nor necessary to achieve the objective of the measure at issue, namely to make good the damage suffered by Condor as a result of travel restrictions and other containment measures for the period from 17 March to 31 December 2020. The applicant claims, in essence, that it holds 9% of the German market for the carriage of passengers by air and that it therefore suffered around 9% of the damage caused by the travel restrictions linked to the COVID-19 pandemic in that Member State. According to the applicant, if that measure were granted to all airlines operating in Germany, its objective would be achieved without discrimination. It adds that the contested decision does not explain why that measure was granted only to Condor, when the other airlines operating in Germany also suffered damage as a result of the travel restrictions linked to that pandemic.
185 The principle of non-discrimination requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified (judgment of 15 April 2008, Nuova Agricast, C‑390/06, EU:C:2008:224, paragraph 66; see also, to that effect, judgment of 5 June 2018, Montero Mateos, C‑677/16, EU:C:2018:393, paragraph 49).
186 The elements which characterise different situations, and hence their comparability, must in particular be determined and assessed in the light of the subject matter and purpose of the EU act which makes the distinction in question. The principles and objectives of the field to which the act relates must also be taken into account (judgment of 16 December 2008, Arcelor Atlantique et Lorraine and Others, C‑127/07, EU:C:2008:728, paragraph 26).
187 Moreover, it should be borne in mind that the principle of proportionality, which is one of the general principles of EU law, requires that acts adopted by EU institutions do not exceed the limits of what is appropriate and necessary in order to attain the legitimate objectives pursued by the legislation in question (judgment of 17 May 1984, Denkavit Nederland, 15/83, EU:C:1984:183, paragraph 25); where there is a choice between several appropriate measures, recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued (judgment of 30 April 2019, Italy v Council (Fishing quota for Mediterranean swordfish), C‑611/17, EU:C:2019:332, paragraph 55).
188 In that regard, first of all, it should be borne in mind that the classification of a national measure as 'State aid', within the meaning of Article 107(1) TFEU, requires, inter alia, that that measure confer a selective advantage on the recipient while distorting or threatening to distort competition (judgments of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 101, and of 23 November 2023, Ryanair v Commission, C‑210/21 P, EU:C:2023:908, paragraph 32). In particular, the requirement of selectivity arising from Article 107(1) TFEU presupposes that the Commission will establish that the economic advantage, understood in the broad sense, arising directly or indirectly from a particular measure specifically benefits one or more undertakings. It falls to the Commission to show, in particular, that the measure in question creates differences between undertakings which, with regard to the objective of the measure, are in a comparable situation. It is necessary therefore that the advantage be granted selectively and that it be liable to place certain undertakings in a more favourable situation than that of others (judgments of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 103, and of 23 November 2023, Ryanair v Commission, C‑210/21 P, EU:C:2023:908, paragraph 34).
189 Nonetheless, State aid granted for the purposes of and in accordance with the conditions laid down by Article 107(2) TFEU is compatible with the internal market. It follows that, unless that provision is to be deprived of all practical effect, State aid which is granted for the purposes of an objective recognised therein and within the limits of what is necessary and proportionate to the achievement of that objective, cannot be held to be incompatible with the internal market for effects which are inherent in any State aid, that is to say, inter alia, for reasons relating to whether the aid is selective or distorts competition (judgments of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraphs 106 and 107, and of 23 November 2023, Ryanair v Commission, C‑210/21 P, EU:C:2023:908, paragraphs 35 and 36).
190 Therefore, aid cannot be considered incompatible with the internal market for reasons that are solely linked to whether it is selective or distorts or threatens to distort competition (judgments of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 108, and of 23 November 2023, Ryanair v Commission, C‑210/21 P, EU:C:2023:908, paragraph 37).
191 Admittedly, the procedure provided for in Article 108 TFEU must never produce a result that is contrary to the specific provisions of the FEU Treaty. Accordingly, State aid which, as such or by reason of some modalities thereof, contravenes provisions or general principles of EU law cannot be declared compatible with the internal market (judgments of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 109, and of 23 November 2023, Ryanair v Commission, C‑210/21 P, EU:C:2023:908, paragraph 38).
192 However, as regards Article 18 TFEU specifically, which lays down the principle of non-discrimination on grounds of nationality, assuming that it is relied on, in essence, by the applicant, it is settled case-law that that article is intended to apply independently only to situations governed by EU law in respect of which the TFEU lays down no specific prohibition of discrimination (judgments of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 110, and of 23 November 2023, Ryanair v Commission, C‑210/21 P, EU:C:2023:908, paragraph 39).
193 Since Article 107(2) TFEU provides for derogations from the principle, referred to in paragraph 1 of that article, that State aid is incompatible with the internal market, and thus allows, in particular, differences in treatment between undertakings, subject to the requirements laid down by those derogations being fulfilled, those derogations must be regarded as 'special provisions' provided for in the Treaties, within the meaning of the first paragraph of Article 18 TFEU (judgments of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 111, and of 23 November 2023, Ryanair v Commission, C‑210/21 P, EU:C:2023:908, paragraph 40).
194 It follows that, in the present case, it is necessary to examine only whether the difference in treatment brought about by the measure at issue is permitted under Article 107(2) TFEU. That examination requires, first, that the objective of that measure meet the requirements provided for in that provision and, second, that the conditions for granting that measure, namely, in the present case, the fact that it benefits only Condor, be such as to enable that objective to be achieved and not go beyond what is necessary to achieve it.
195 In that connection, as regards, in the first place, the objective of the measure at issue, the applicant does not dispute that compensation for the damage suffered by an airline during the overall compensation period, as a result of the travel restrictions and other containment measures linked to the COVID-19 pandemic, makes it possible to make good, even if only in part, the damage caused by that pandemic. Nor does the applicant dispute that that pandemic constitutes an exceptional occurrence within the meaning of Article 107(2)(b) TFEU.
196 As regards, in the second place, the modalities for granting the measure at issue, namely the fact that it benefits only Condor, first, it must be observed that that measure was intended to compensate for the damage suffered by Condor as a result of the travel restrictions and other containment measures linked to the COVID-19 pandemic only during a specific period and in accordance with a method specified in the contested decision.
197 As is clear from the contested decision, the measure at issue was granted taking into consideration the gradual lifting of the travel restriction measures according to the compensation period concerned. Accordingly, the Commission distinguished between the methods of calculating the damage for each of the two compensation periods. In particular, as regards the second compensation period, the method adopted is explained by the fact that general travel restrictions and containment measures were partially lifted at national and EU level in the second part of June 2020, with the result that flights could gradually resume from July 2020, even though many travel restrictions remained in force during the latter period.
198 Second, it follows from the contested decision that Condor was severely affected by the travel restrictions and other containment measures linked to the COVID-19 pandemic imposed during the overall compensation period.
199 As is apparent from the contested decision, Condor is a charter airline which provides connectivity in Germany by offering air transport services to individual customers, tour operators and travel agencies from several airports, in particular in Germany, by focusing on the leisure travel market. In addition, Condor played an important role as a facilitator and 'consolidator' on the German leisure travel market owing to the specific features of its services, which made it possible to give access to leisure flights to several thousand travel agencies that did not own an IATA licence through various interfaces that other airlines did not offer, it being specified that, in the absence of those interfaces, those agencies had to bear additional costs, as well as because of the jobs it provided (see, to that effect, judgment of 8 May 2024, Ryanair v Commission (Condor; restructuring aid), T‑28/22, under appeal, EU:T:2024:301, paragraphs 64 to 66 and 75 (not published)).
200 As whether the measure at issue goes beyond what is necessary to achieve the objective pursued, it should be stated that the amount of that measure does not exceed the amount of the damage suffered by Condor during the overall compensation period as a result of the travel restrictions and other containment measures linked to the COVID-19 pandemic, as is apparent in particular from paragraph 222 of the contested decision.
201 Consequently, it must be held that the applicant's arguments do not demonstrate that the Commission should have had doubts as to the appropriateness and proportionality of the difference in treatment in favour of Condor resulting from the measure at issue.
(2) Breach of the freedom of establishment and of the freedom to provide services
202 The applicant submits, in essence, that the Commission should have had doubts as to the compatibility of the measure at issue with the internal market, given that it constitutes a restriction on the freedom of establishment and the freedom to provide services on account of its discriminatory nature.
203 In that regard, as pointed out in paragraph 191 above, the procedure under Article 108 TFEU must never produce a result which is contrary to the specific provisions of the Treaty. Accordingly, State aid which, as such or by reason of some modalities thereof, contravenes provisions or general principles of EU law cannot be declared compatible with the internal market (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 131).
204 However, it should be observed, first, that the restrictive effects which an aid measure has on the freedom to provide services or the freedom of establishment still do not constitute a restriction prohibited by the Treaty, since it may be inherent in the very nature of State aid, for example its selective nature (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 132).
205 Second, where the modalities of an aid measure are so indissolubly linked to the object of the aid that it is impossible to evaluate them separately, their effect on the compatibility or incompatibility of the aid viewed as a whole with the internal market must therefore of necessity be determined by means of the procedure prescribed in Article 108 TFEU (judgment of 22 March 1977, Iannelli & Volpi, 74/76, EU:C:1977:51, paragraph 14; see, also, judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 133 and the case-law cited).
206 In this instance, as is apparent from paragraph 28 of the contested decision, the choice of Condor as beneficiary of the measure at issue is part of the object of that measure and, even if that choice were to be regarded as a modality of that measure, such a modality would be indissolubly linked to that object, which is to compensate that airline for the damage resulting from travel restrictions and other containment measures linked to the COVID-19 pandemic. It follows that the effect resulting from the choice of Condor as beneficiary of that measure on the internal market cannot be examined separately from the compatibility of that aid measure viewed as a whole with that market by means of the procedure prescribed in Article 108 TFEU.
207 Although the applicant maintains that the measure at issue constitutes an obstacle to the freedom of establishment and the freedom to provide services because of its discriminatory nature, it does not demonstrate, in the present case, that that measure produced restrictive effects which went beyond those inherent to State aid granted in accordance with the requirements laid down in Article 107(2)(b) TFEU.
208 Nor, furthermore, does the applicant show that the measure at issue is such as to deter it from providing services to or from Germany or from exercising its freedom of establishment in Germany.
209 It follows that the applicant has not demonstrated that the Commission should have had doubts as to the compatibility of the measure at issue with the freedom of establishment and the freedom to provide services.
210 In the light of the foregoing, the second set of evidence must be rejected.
211 Consequently, the third plea in law must be rejected in its entirety.
2. The fourth plea in law, alleging infringement of the obligation to state reasons
212 The applicant claims that the contested decision is vitiated by several defects in the statement of reasons.
213 The Commission, supported by the Federal Republic of Germany and Condor, disputes that line of argument.
214 The statement of reasons required by Article 296 TFEU is an essential procedural requirement and must be appropriate to the measure at issue and disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the court having jurisdiction to exercise its power of review. Accordingly, the requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of concern within the meaning of the fourth paragraph of Article 263 TFEU, may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements laid down in Article 296 TFEU must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (judgments of 2 April 1998, Commission v Sytraval and Brink's France, C‑367/95 P, EU:C:1998:154, paragraph 63; of 22 June 2004, Portugal v Commission, C‑42/01, EU:C:2004:379, paragraph 66; and of 15 April 2008, Nuova Agricast, C‑390/06, EU:C:2008:224, paragraph 79).
215 In that regard, a decision such as the contested decision, which is taken within a short period of time, must simply set out the reasons why the Commission takes the view that it is not faced with serious difficulties in assessing the compatibility of the aid at issue with the internal market (judgment of 22 December 2008, Régie Networks, C‑333/07, EU:C:2008:764, paragraph 65).
216 The applicant's arguments must be examined in the light of those principles.
(a) Failure to state reasons as regards the method for calculating Condor's forecasted EBT
217 The applicant submits that the contested decision does not contain any reasoning as regards the method for calculating Condor's forecasted EBT for 2020.
218 However, it is common ground that an undertaking's EBT is calculated, by definition, on the basis of its revenue minus expenses (excluding tax). As regards the method for calculating Condor's forecasted EBT for 2020, on which the Commission based the counterfactual scenario, Table 26 of the contested decision provides precise indications as to the factors taken into consideration by the Commission for the purposes of that calculation, with the result that the applicant is wrong to claim that the Commission did not set out that method.
219 Those arguments must therefore be rejected.
(b) Failure to state reasons as regards the failure to indicate measures to mitigate the damage
220 The applicant submits that the contested decision is vitiated by a failure to state reasons in so far as the Commission does not state whether Condor adopted measures to mitigate the damage.
221 In so far as the applicant refers to the statement of reasons for the contested decision as regards the deduction of avoided costs in so far as the Commission does not state whether Condor adopted measures to mitigate the damage, that decision is sufficiently reasoned in that regard, as is apparent from paragraphs 140 and 141 above.
222 In so far as the applicant submits that the statement of reasons for the contested decision is vitiated by a defect as regards Condor's 'avoidable' costs, in so far as the Commission does not state whether Condor adopted measures to mitigate the damage, the Commission was not required to examine such an issue or, consequently, to provide a statement of reasons in that regard in that decision since, as is apparent from paragraphs 142 to 145 above, Article 107(2)(b) TFEU does not require a maximum reduction in the beneficiary's costs.
(c) Inadequate statement of reasons as regards the calculation of the damage suffered
223 The applicant claims that the omission of certain confidential data in the contested decision makes the calculation of the damage suffered by Condor 'unintelligible'. It refers by way of example to Table 5 of that decision, which refers to 'large variations' without those variations being explained by the Commission. It also criticises the Commission for not having disclosed Condor's forecasted or actual EBT in that decision, even if only as ranges.
224 It is true that, in the contested decision, several figures were not disclosed on the ground that they are business secrets, that decision presenting some of those data as ranges, while others are omitted altogether.
225 However, contrary to what the applicant claims, such omissions do not prevent the contested decision from being understood. Most of the tables in that decision set out the delta between the data compared, for example between those relating to Condor's forecasts for 2020, drawn up before the outbreak of the COVID-19 pandemic, or those actually recorded in 2019, and those recorded in 2020, so that they can be sufficiently interpreted without it being necessary to disclose the exact data. In addition, those tables were explained by the Commission in that decision, in the paragraphs preceding or following those tables.
226 In particular, as regards Table 5 of the contested decision, taken as an example by the applicant, although it is true that the exact number of tickets sold by Condor in February and March 2019 and in February and March 2020 is omitted, the table nevertheless indicates the difference in the number of tickets between those two dates, expressed within a range of 10 percentage points, with that range indicating whether that difference is positive or negative.
227 The same applies to the data relating to Condor's EBT. Accordingly, by way of example, Table 27 of the contested decision, which relates to the period from March to June 2020, although it does not contain Condor's exact EBT for each month concerned, includes, first, Condor's forecasted EBT and its actual EBT for the whole of that period. Second, it indicates Condor's net losses, specifying the losses incurred for each month concerned and for the whole of the period at issue on the basis of those data. In addition, in response to a question from the Court, the Commission disclosed the figures contained in Tables 26 and 28 of the contested decision, including Condor's EBT and EBITDA for the first compensation period, and the applicant was able to submit its observations on those data at the hearing.
228 Accordingly, the omissions of confidential data identified by the applicant did not prevent it from knowing the reasons underlying the contested decision or prevent the Court from exercising its power of review, with the result that the Commission did not fail to fulfil its obligation to state reasons on that point.
(d) The other defects in the statement of reasons relied on by the applicant
229 In the context of its first plea, the applicant put forward a number of other defects in the statement of reasons which vitiate the contested decision. First, it submits that, by failing to examine in that decision which part of Condor's losses was attributable to its pre-existing difficulties and which was attributable to the travel restrictions and other containment measures linked to the COVID-19 pandemic, the Commission failed to fulfil its obligation to state reasons.
230 However, in the contested decision, the Commission explained in detail the method, adapted to the travel restrictions and the compensation periods at issue, in order to ensure that the damage compensated was directly linked to the introduction of those restrictions and that the measure at issue would not result in double compensation. In particular, as noted in paragraph 75 above, the Commission stated that it was precisely for that reason that it had based its analysis on the 2020 business plan rather than on Condor's results in 2019.
231 Second, the applicant alleges a failure to state reasons in the contested decision as regards the determination of the cut-off date between the first compensation period and the second compensation period. However, as is apparent from paragraphs 125 and 126 above, the Commission sufficiently explained in that decision the reasons for determining the cut-off date between those two compensation periods.
232 Third, the applicant alleges a failure to state reasons in the contested decision in that the Commission merely stated that the German authorities undertook that the measure at issue would not be cumulated with other aid, without explaining how that cumulation would be avoided, even though the first compensation period and the period covered by the decision on rescue aid partially overlap. In that regard, it should be noted, first of all, that, in paragraph 152 of that decision, the Commission examined, albeit briefly, whether the fact that Condor had received rescue aid was such as to prevent the grant of the measure at issue, concluding that that was not the case. It follows that the Commission took that aid into account when it examined the criteria for the compatibility of that measure with the internal market. Next, in the light of the considerations set out in paragraphs 175 to 180 above, the Commission was not required to provide more reasons in that regard in that decision.
233 Fourth, in the reply, the applicant claims that the Commission failed to fulfil its obligation to state reasons, in that it failed to explain in the contested decision why it had not taken into account a number of 'important external factors (i.e., unrelated to Condor's difficulties)' 'in the counterfactual scenario'.
234 In that regard, it must be borne in mind that, according to settled case-law, the obligation to state reasons is an essential procedural requirement, as distinct from the question whether the reasons given are well founded, which goes to the substantive legality of the contested measure (see judgment of 9 July 2019, Germany v Commission, T‑53/18, not published, EU:T:2019:490, paragraph 24 and the case-law cited). In criticising the Commission for not taking those factors into consideration, the applicant puts forward arguments identical to those rejected in paragraphs 105 to 113 above, which concern the merits of the statement of reasons of the contested decision and not compliance with the obligation to state reasons for that decision. Accordingly, that argument must also be rejected.
235 In the light of those considerations, the fourth plea in law must be rejected and, accordingly, the action must be dismissed in its entirety.
IV. Costs
236 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 applicant has been unsuccessful, it must be ordered to bear its own costs and to pay those incurred by the Commission and by Condor, in accordance with the forms of order sought by those parties.
237 Under Article 138(1) of the Rules of Procedure, the Member States which have intervened in the proceedings are to bear their own costs. Therefore, the Federal Republic of Germany is ordered to bear its own costs.
On those grounds,
THE GENERAL COURT (Eighth Chamber)
hereby:
1. Dismisses the action;
2. Orders Ryanair DAC to bear its own costs and to pay those incurred by the European Commission and by Condor Flugdienst GmbH;
3. Orders the Federal Republic of Germany to bear its own costs.
Kornezov | De Baere | Kingston |
Delivered in open court in Luxembourg on 25 June 2025.
V. Di Bucci | S. Papasavvas |
Registrar | President |
* Language of the case: English.
© European Union
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