Lufthansa loses final appeal in Hahn state aid battle
Lufthansa (LH, Frankfurt Int’l) has lost an appeal against the European Commission in a dispute over millions in regional aid that the federal states of Rhineland-Palatinate and Hesse gave to Frankfurt Hahn Airport, a judgement published on January 20 shows.
Confirming two earlier rulings, the European Court of Justice in Luxembourg rejected the lawsuit and closed the case (number C-594/19) in which the German carrier had taken a stand against a 2014 decision allowing the state aid, provided from 2009 to 2011, as a result of which Ryanair (FR, Dublin Int’l) allegedly benefitted through the airport’s contracts on discounted airport charges.
The ruling confirmed previous judgements at the European Court of Justice in July 2021 and at the General Court of the European Union in 2019.
Lufthansa first took legal action by objecting to a European Commission decision in 2014 approving funds to Frankfurt Hahn from the regional authorities in the form of a credit line exceeding EUR49 million euros (USD55.5 million).
In its ruling, the European Court of Justice said the German carrier had not been individually affected by the decision in Brussels and that the applicant had failed to provide evidence to demonstrate that the aid had substantially harmed its position.
Lufthansa, whose main hub is Frankfurt Int’l, “had not established a significant fall in its turnover, non-negligible financial losses, or a significant reduction in its market share on the markets in question following the adoption of the measures in favour of Frankfurt-Hahn Airport, even though the latter would have been transferred to Ryanair,” the judge said in summing up.
Indeed, “the applicant’s arguments were limited to referring to the general competitive pressure exerted by low-cost airlines on traditional airlines, [but] such a finding is not to show that the applicant was substantially affected by the contested decision.”
Lufthansa commented to ch-aviation: “We regret that the court did not follow our argumentation in these legal proceedings. We remain convinced that certain grants to Hahn Airport as well as contracts of the airport with Ryanair are not compatible with European state aid law and we will continue to work for a level playing field in airline competition.”
Ryanair began flying to the former military airport in 2001 and at the airline’s request its name was changed from Hahn to Frankfurt Hahn. Lufthansa launched legal proceedings against Ryanair the following year, arguing that using “Frankfurt” in the name was false advertising. A ruling allowed the name to stay but forced the budget carrier to clarify in its advertising that it was 120 kilometres by road from the city of Frankfurt.
Twenty years later, in October 2021, the airport’s operator Flughafen Frankfurt-Hahn GmbH filed for insolvency but vowed to continue operating.