German carrier Condor is facing a renewed investigation into financial support granted by the country’s government, approval for which was recently annulled by the European General Court.
The in-depth investigation will probe whether a €321 million ($347 million) restructuring package – approved in July 2021 – is compatible with state-aid rules.
Assessment of Condor’s compensation measures has been complex. The carrier was provided with rescue financing from the German government, through development bank KfW, when leisure company Thomas Cook Group collapsed in 2019.
It was then further financed when, a few months later, the Covid-19 pandemic caused havoc in the air transport sector.
Condor’s compensation measures had already been the subject of a General Court annulment in June 2021.
The Commission says, in regard to the latest investigation, that the carrier had been provided with €90 million in debt write-off from a €550 million public loan, plus a re-organisation of the loan’s repayment conditions, and a €20 million write-of of interest debt.
Approval of this funding, however, was overturned by the General Court in May this year after it ruled that the aid had been granted without a formal investigation procedure.
“The Court held that the Commission should have assessed whether Germany received sufficient up-sides, which would ensure that former shareholders and subordinated debt-holders sufficiently shared the burden of restructuring, in order to reduce the aid amount,” the Commission states.
It adds that it will re-investigate the restructuring measures to determine whether these elements would have influenced the “nature and size” of the compensation.
