The European Commission has opened an in-depth investigation to assess whether Germany's EUR321.2 million euros (USD347.5 million) in restructuring aid granted to leisure carrier Condor (DE, Frankfurt International) aligns with European Union state aid rules.

This comes after the European General Court on May 8 annulled the Commission's initial approval of the funding in July 2021. The court decision was a win for Irish budget carrier Ryanair, which had contested Brussels' original decision.

The restructuring aid enabled Condor to recover after it had filed for insolvency in September 2019 following the bankruptcy of its parent company, Thomas Cook Group. The aid consisted of a EUR90 million (USD97 million) debt write-off on a state-guaranteed EUR550 million (USD595 million) public loan extended by the German development bank KfW. Repayment conditions of the remainder of that loan were restructured, and EUR20.2 million (USD21 million) in interest was written off.

The General Court ruled that the Commission had failed to assess if Germany received adequate compensation for debt write-offs to Condor. The court stressed the need to evaluate whether Germany’s returns ensured proper burden sharing by former shareholders and debt holders. The Commission, in a statement, said it would now particularly focus on whether additional burden sharing and "reduction of moral hazard" were feasible and necessary and how these factors might affect compensatory measures.

A Condor spokesperson said the airline was confident that the investigation would soon be completed and that the Commission would confirm the approval of the restructuring aid. "The judgment from May and the investigation proceedings initiated yesterday have absolutely no impact on Condor's business situation and flight operations," she said.

"The General Court largely rejected Ryanair's pleas in law and only ruled on one point that the Commission should not have approved the aid after a preliminary examination, but that an in-depth examination was necessary. Specifically, this concerns the question of whether the state, as a provider of aid, participates to a sufficient extent in Condor's future value gains. The Commission's re-examination, therefore, only concerns this one point of criticism by the Court. The judgment was not a permanent 'no' to the aid, and the investigation is not about the aid itself, but about the state's participation in Condor's gain in value," she explained.