Commission opens in-depth State aid investigation into €321.2 million German measure to restructure Condor

The European Commission has opened an in-depth investigation to assess whether a German €321.2 million restructuring measure in favour of Condor is in line with EU State aid rules. The measure was initially approved in July 2021 by the Commission under the State aid Rescue and Restructuring Guidelines, but the Commission's decision was subsequently annulled by the judgment of the General Court of 8 May 2024.

The Commission's investigation 

Condor is a German charter airline, which provides air transport services to individual clients and tour operators from its hubs in Germany, with a focus on the leisure travel market. In September 2019, it had to file for insolvency due to the entry into liquidation of its parent company, the Thomas Cook Group.

In July 2021, the Commission approved a €321.2 million restructuring measure to enable Condor's return to viability. The restructuring measure consisted of: (i) €90 million debt write-off on a state-guaranteed €550 million public loan extended by the German development bank KfW, (ii) a restructuring of the repayment conditions of the remainder of that loan, to the extent it was used for financing restructuring costs, and (iii) a €20.2 million debt write-off on interest due by Condor in the context of coronavirus compensation it had received.

In its judgment of 8 May 2024, the General Court annulled the Commission's 2021 decision. The General Court considered that the Commission had not assessed whether Germany received sufficient remuneration for the debt write-offs granted to Condor. In particular, 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.

Following the General Court's judgment, the Commission will now further investigate the restructuring measure. In particular, the Commission will assess whether, and if so, to what extent, further burden sharing, and reduction of moral hazard was possible and required and whether this would have had an influence on the nature and size of the compensatory measures put in place. 

The opening of an in-depth investigation gives Germany, as well as interested third parties, the opportunity to submit comments. It does not prejudge in any way the outcome of the investigation.