Lufthansa (LH, Frankfurt International) has confirmed it is fighting a European court annulment of its EUR6 billion euro (USD6.6 billion) state aid sanctioned by the European Commission in 2020 under state aid rules during Covid-19.

The German airline has lodged an appeal with the European Union Court of Justice against the May 2023 finding (case C-457/23 P) by the lower EU General Court that the state aid was granted in error, thereby ruling in favour of competitors Ryanair (FR, Dublin International) and Condor (DE, Frankfurt International) who had complained to the court on antitrust grounds. The General Court found that Lufthansa could have raised part of the recapitalisation on the market. It also established the measure did not include a mandatory incentive for a quick bailout repayment.

Still, by November 12, 2021, Lufthansa announced it had repaid EUR3.5 billion of the government stabilisation funds and had cancelled the rest. This included two "silent participations" totalling EUR2.5 billion (USD2.7 billion) from Germany's Covid-linked Economic Stabilisation Fund (ESF) and a EUR1 billion (USD1.2 billion) loan from the KfW IPEX-Bank (Kreditanstalt für Wiederaufbau).

"We can confirm that Lufthansa has appealed the ruling," a spokeswoman informed ch-aviation. "Deutsche Lufthansa AG has already fully repaid the stabilisation measures approved by the European Commission and around EUR92 million (USD101 million) in interest rates. The two 'silent participations' of the Economic Stabilisation Fund (ESF) were repaid in October and November 2021. Last year [2022], the ESF sold its shares in Deutsche Lufthansa AG acquired as part of the stabilisation for a total gain of EUR760 million (USD841 million). The stabilisation was thus already fully terminated before the court ruling," she explained.

The German government's package initially provided measures and loans totalling up to EUR9 billion (USD9.9 billion), of which the company drew down a total of around EUR3.8 billion (USD4.2 billion). This included around EUR306 million (USD338 million) with which the ESF built up its shareholding in Deutsche Lufthansa AG.

To refinance existing liabilities and the state aid, Lufthansa said it took various debt and equity financing measures later in 2020. In November of that year, the company made a "comeback" on the capital markets with a convertible bond with a total volume of EUR600 million (USD664 million) and a corporate bond of EUR1billion (USD1.2 billion).