{"attribution":{"source":"legal.exploreworldai.com","canonical":"https://legal.exploreworldai.com/api/public/v1/judgment-text?id=eu:c-457-23-p","cite_as":"NovaCopilot, legal.exploreworldai.com (https://legal.exploreworldai.com/api/public/v1/judgment-text?id=eu:c-457-23-p)","license":"https://legal.exploreworldai.com/revision","version":"legal-2026-11-02","fingerprint":"ewai:eu:f6410a","proof":"sha256:874f08f180a5edc28d062602d99145f6a1d09d8533be88ef32574b2e506184c5","jurisdiction":"eu","lang":"en","publisher":"NovaCopilot by ExploreWorld Legal","terms":"https://legal.exploreworldai.com/om"},"brand_source":"Source: NovaCopilot","item":{"schema_version":"1.0.0","id":"eu:c-457-23-p","jurisdiction":"eu","lang":"en","brand_source":"Source: NovaCopilot","brand":{"product":"NovaCopilot","platform":"ExploreWorldAI","infrastructure":"ExploreWorld Legal","infrastructure_url":"legal.exploreworldai.com","legal_entity":"Valkiv Ventures AB","permanent_url":"https://legal.exploreworldai.com/novacopilot","source":"Source: NovaCopilot","powered_by":"Powered by NovaCopilot","license":"https://legal.exploreworldai.com/licensvillkor"},"sections":[{"title":"62023CJ0457","paragraphs":[]},{"title":"JUDGMENT OF THE COURT (Third Chamber)","paragraphs":[]},{"title":"23 April 2026 (\n *1\n )","paragraphs":["para_4","para_5","para_6","para_7","para_8","para_9","para_10","para_11","para_12","para_13","para_14","para_15","para_16","para_17","para_18","para_19","para_20","para_21","para_22","para_23","para_24"]},{"title":"Judgment","paragraphs":[]},{"title":"1","paragraphs":["para_27"]},{"title":"Legal context","paragraphs":[]},{"title":"Regulation (EEC) No 95/93","paragraphs":[]},{"title":"2","paragraphs":["para_31","para_32"]},{"title":"(a)","paragraphs":["para_34","para_35"]},{"title":"The Temporary Framework","paragraphs":[]},{"title":"3","paragraphs":["para_38","para_39","para_40","para_41","para_42"]},{"title":"3.11.2. Eligibility and entry conditions","paragraphs":["para_44"]},{"title":"The COVID-19 recapitalisation measure must fulfil the following conditions:","paragraphs":[]},{"title":"(a)","paragraphs":["para_47","para_48"]},{"title":"(c)","paragraphs":["para_50","para_51","para_52","para_53","para_54"]},{"title":"3.11.4. Amount of the recapitalisation","paragraphs":["para_56","para_57","para_58"]},{"title":"3.11.5. Remuneration and exit of the State","paragraphs":[]},{"title":"General principles","paragraphs":["para_61","para_62","para_63"]},{"title":"Remuneration of equity instruments","paragraphs":["para_65","para_66","para_67","para_68"]},{"title":"(a)","paragraphs":["para_70"]},{"title":"(b)","paragraphs":["para_72","para_73","para_74","para_75","para_76","para_77","para_78"]},{"title":"Remuneration of hybrid capital instruments","paragraphs":["para_80","para_81","para_82","para_83","para_84","para_85","para_86","para_87","para_88","para_89","para_90","para_91"]},{"title":"The background to the dispute and the decision at issue","paragraphs":[]},{"title":"4","paragraphs":["para_94"]},{"title":"5","paragraphs":["para_96"]},{"title":"6","paragraphs":["para_98"]},{"title":"7","paragraphs":["para_100"]},{"title":"8","paragraphs":[]},{"title":"The measure at issue consisted of the following three elements:","paragraphs":["para_103","para_104","para_105","para_106","para_107","para_108"]},{"title":"9","paragraphs":["para_110","para_111","para_112","para_113","para_114","para_115","para_116","para_117","para_118","para_119","para_120"]},{"title":"10","paragraphs":["para_122"]},{"title":"The procedure before the General Court and the judgment under appeal","paragraphs":[]},{"title":"11","paragraphs":["para_125"]},{"title":"12","paragraphs":["para_127"]},{"title":"13","paragraphs":["para_129"]},{"title":"14","paragraphs":["para_131"]},{"title":"15","paragraphs":["para_133"]},{"title":"16","paragraphs":["para_135"]},{"title":"17","paragraphs":["para_137","para_138","para_139","para_140","para_141","para_142","para_143","para_144","para_145","para_146","para_147"]},{"title":"18","paragraphs":["para_149"]},{"title":"Forms of order sought by the parties to the appeal","paragraphs":[]},{"title":"19","paragraphs":[]},{"title":"By its appeal, DLH claims that the Court of Justice should:","paragraphs":["para_153","para_154","para_155","para_156","para_157","para_158"]},{"title":"20","paragraphs":[]},{"title":"Ryanair and Condor contend that the Court should:","paragraphs":["para_161","para_162","para_163","para_164"]},{"title":"21","paragraphs":[]},{"title":"The Commission contends that the Court should:","paragraphs":["para_167","para_168","para_169","para_170"]},{"title":"22","paragraphs":[]},{"title":"The Federal Republic of Germany contends that the Court should:","paragraphs":["para_173","para_174","para_175","para_176","para_177","para_178"]},{"title":"The appeal","paragraphs":[]},{"title":"23","paragraphs":["para_181"]},{"title":"The first ground of appeal","paragraphs":[]},{"title":"Arguments of the parties","paragraphs":[]},{"title":"24","paragraphs":["para_185"]},{"title":"25","paragraphs":["para_187"]},{"title":"26","paragraphs":["para_189"]},{"title":"27","paragraphs":["para_191"]},{"title":"28","paragraphs":["para_193"]},{"title":"29","paragraphs":["para_195"]},{"title":"30","paragraphs":["para_197"]},{"title":"31","paragraphs":["para_199"]},{"title":"32","paragraphs":["para_201"]},{"title":"Findings of the Court","paragraphs":[]},{"title":"33","paragraphs":["para_204"]},{"title":"34","paragraphs":["para_206"]},{"title":"35","paragraphs":["para_208"]},{"title":"36","paragraphs":["para_210"]},{"title":"37","paragraphs":["para_212"]},{"title":"38","paragraphs":["para_214"]},{"title":"39","paragraphs":["para_216"]},{"title":"40","paragraphs":["para_218"]},{"title":"41","paragraphs":["para_220"]},{"title":"42","paragraphs":["para_222"]},{"title":"43","paragraphs":["para_224"]},{"title":"44","paragraphs":["para_226"]},{"title":"The second ground of appeal","paragraphs":[]},{"title":"Arguments of the parties","paragraphs":[]},{"title":"45","paragraphs":["para_230"]},{"title":"46","paragraphs":["para_232"]},{"title":"47","paragraphs":["para_234"]},{"title":"48","paragraphs":["para_236"]},{"title":"49","paragraphs":["para_238"]},{"title":"50","paragraphs":["para_240"]},{"title":"51","paragraphs":["para_242"]},{"title":"52","paragraphs":["para_244"]},{"title":"Findings of the Court","paragraphs":[]},{"title":"53","paragraphs":["para_247"]},{"title":"54","paragraphs":["para_249"]},{"title":"55","paragraphs":["para_251"]},{"title":"56","paragraphs":["para_253"]},{"title":"57","paragraphs":["para_255"]},{"title":"58","paragraphs":["para_257"]},{"title":"59","paragraphs":["para_259"]},{"title":"60","paragraphs":["para_261"]},{"title":"61","paragraphs":["para_263"]},{"title":"62","paragraphs":["para_265"]},{"title":"63","paragraphs":["para_267"]},{"title":"64","paragraphs":["para_269"]},{"title":"65","paragraphs":["para_271"]},{"title":"66","paragraphs":["para_273"]},{"title":"67","paragraphs":["para_275"]},{"title":"68","paragraphs":["para_277"]},{"title":"69","paragraphs":["para_279"]},{"title":"70","paragraphs":["para_281"]},{"title":"71","paragraphs":["para_283"]},{"title":"72","paragraphs":["para_285"]},{"title":"73","paragraphs":["para_287"]},{"title":"74","paragraphs":["para_289"]},{"title":"75","paragraphs":["para_291"]},{"title":"76","paragraphs":["para_293"]},{"title":"The third ground of appeal","paragraphs":[]},{"title":"Arguments of the parties","paragraphs":[]},{"title":"77","paragraphs":["para_297"]},{"title":"78","paragraphs":["para_299"]},{"title":"79","paragraphs":["para_301"]},{"title":"80","paragraphs":["para_303"]},{"title":"81","paragraphs":["para_305"]},{"title":"82","paragraphs":["para_307"]},{"title":"83","paragraphs":["para_309"]},{"title":"Findings of the Court","paragraphs":[]},{"title":"84","paragraphs":["para_312"]},{"title":"85","paragraphs":["para_314"]},{"title":"86","paragraphs":["para_316"]},{"title":"87","paragraphs":["para_318"]},{"title":"88","paragraphs":["para_320"]},{"title":"89","paragraphs":["para_322"]},{"title":"90","paragraphs":["para_324"]},{"title":"91","paragraphs":["para_326"]},{"title":"92","paragraphs":["para_328"]},{"title":"93","paragraphs":["para_330"]},{"title":"94","paragraphs":["para_332"]},{"title":"95","paragraphs":["para_334"]},{"title":"96","paragraphs":["para_336"]},{"title":"97","paragraphs":["para_338"]},{"title":"98","paragraphs":["para_340"]},{"title":"99","paragraphs":["para_342"]},{"title":"100","paragraphs":["para_344"]},{"title":"The fourth ground of appeal","paragraphs":[]},{"title":"Arguments of the parties","paragraphs":[]},{"title":"101","paragraphs":["para_348"]},{"title":"102","paragraphs":["para_350"]},{"title":"103","paragraphs":["para_352"]},{"title":"104","paragraphs":["para_354"]},{"title":"105","paragraphs":["para_356"]},{"title":"106","paragraphs":["para_358"]},{"title":"107","paragraphs":["para_360"]},{"title":"108","paragraphs":["para_362"]},{"title":"109","paragraphs":["para_364"]},{"title":"Findings of the Court","paragraphs":[]},{"title":"110","paragraphs":["para_367"]},{"title":"111","paragraphs":["para_369"]},{"title":"112","paragraphs":["para_371"]},{"title":"113","paragraphs":["para_373"]},{"title":"114","paragraphs":["para_375"]},{"title":"115","paragraphs":["para_377"]},{"title":"116","paragraphs":["para_379"]},{"title":"117","paragraphs":["para_381"]},{"title":"118","paragraphs":["para_383"]},{"title":"119","paragraphs":["para_385"]},{"title":"120","paragraphs":["para_387"]},{"title":"121","paragraphs":["para_389"]},{"title":"122","paragraphs":["para_391"]},{"title":"123","paragraphs":["para_393"]},{"title":"124","paragraphs":["para_395"]},{"title":"125","paragraphs":["para_397"]},{"title":"126","paragraphs":["para_399"]},{"title":"127","paragraphs":["para_401"]},{"title":"128","paragraphs":["para_403"]},{"title":"The fifth ground of appeal","paragraphs":[]},{"title":"Arguments of the parties","paragraphs":[]},{"title":"129","paragraphs":["para_407"]},{"title":"130","paragraphs":["para_409"]},{"title":"131","paragraphs":["para_411"]},{"title":"132","paragraphs":["para_413"]},{"title":"133","paragraphs":["para_415"]},{"title":"134","paragraphs":["para_417"]},{"title":"135","paragraphs":["para_419"]},{"title":"136","paragraphs":["para_421"]},{"title":"137","paragraphs":["para_423"]},{"title":"Findings of the Court","paragraphs":[]},{"title":"138","paragraphs":["para_426"]},{"title":"139","paragraphs":["para_428"]},{"title":"140","paragraphs":["para_430"]},{"title":"141","paragraphs":["para_432"]},{"title":"142","paragraphs":["para_434"]},{"title":"143","paragraphs":["para_436"]},{"title":"144","paragraphs":["para_438"]},{"title":"145","paragraphs":["para_440"]},{"title":"The sixth ground of appeal","paragraphs":[]},{"title":"Arguments of the parties","paragraphs":[]},{"title":"146","paragraphs":["para_444"]},{"title":"147","paragraphs":["para_446"]},{"title":"148","paragraphs":["para_448"]},{"title":"149","paragraphs":["para_450"]},{"title":"150","paragraphs":["para_452"]},{"title":"Findings of the Court","paragraphs":[]},{"title":"151","paragraphs":["para_455"]},{"title":"152","paragraphs":["para_457"]},{"title":"153","paragraphs":["para_459"]},{"title":"154","paragraphs":["para_461"]},{"title":"155","paragraphs":["para_463"]},{"title":"156","paragraphs":["para_465"]},{"title":"157","paragraphs":["para_467"]},{"title":"158","paragraphs":["para_469"]},{"title":"Conclusion","paragraphs":[]},{"title":"159","paragraphs":["para_472"]},{"title":"160","paragraphs":["para_474"]},{"title":"Costs","paragraphs":[]},{"title":"161","paragraphs":["para_477"]},{"title":"162","paragraphs":["para_479"]},{"title":"163","paragraphs":["para_481"]},{"title":"164","paragraphs":["para_483"]},{"title":"On those grounds, the Court (Third Chamber) hereby:","paragraphs":["para_485"]},{"title":"Dismisses the appeal;","paragraphs":["para_487","para_488","para_489","para_490"]},{"title":"Lycourgos","paragraphs":[]},{"title":"Spineanu-Matei","paragraphs":[]},{"title":"Rodin","paragraphs":[]},{"title":"Piçarra","paragraphs":[]},{"title":"Fenger","paragraphs":["para_496"]},{"title":"A. Calot Escobar","paragraphs":[]},{"title":"Registrar","paragraphs":[]},{"title":"C. Lycourgos","paragraphs":[]},{"title":"President of the Chamber","paragraphs":["para_501"]}],"paragraphs":[{"text":"62023CJ0457","paragraph_id":"para_1"},{"text":"JUDGMENT OF THE COURT (Third Chamber)","paragraph_id":"para_2"},{"text":"23 April 2026 (\n *1\n )","paragraph_id":"para_3"},{"text":"(Appeal – State aid – Article 107(3)(b) TFEU – German air transport market – Aid granted by Germany to an airline in the context of the COVID-19 pandemic – Temporary Framework for State aid measures – Recapitalisation of Deutsche Lufthansa AG – Decision by the Commission not to raise any objections – Aid intended to remedy a serious disturbance in the economy)","paragraph_id":"para_4"},{"text":"In Case C‑457/23 P,","paragraph_id":"para_5"},{"text":"APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 20 July 2023,","paragraph_id":"para_6"},{"text":"Deutsche Lufthansa AG , established in Cologne (Germany), represented initially by J. Burger, H.‑J. Niemeyer, C. Sielmann, and C. Wilken, Rechtsanwälte, subsequently by P. Heuser, H.‑J. Niemeyer, C. Sielmann and M. Wilken, Rechtsanwälte,","paragraph_id":"para_7"},{"text":"appellant,","paragraph_id":"para_8"},{"text":"the other parties to the proceedings being:","paragraph_id":"para_9"},{"text":"Ryanair DAC , established in Swords (Ireland), represented initially by F.‑C. Laprévote and E. Vahida, avocats, D. Pérez de Lamo and S. Rating, abogados, subsequently by F.‑C. Laprévote and E. Vahida, avocats, and S. Rating, abogado,","paragraph_id":"para_10"},{"text":"Condor Flugdienst GmbH , established in Neu-Isenburg (Germany), represented initially by A. Israel and J. Lang, Rechtsanwälte, G.J. Dietrich, Barrister, and E. Wright, avocate, subsequently by A. Israel and J. Lang, Rechtsanwälte, G.J. Dietrich, Barrister, subsequently by A. Israel and J. Lang, Rechtsanwälte, T. Peevska, avocate, and lastly by A. Israel and J. Lang, Rechtsanwälte, and M. Álvarez-Requejo Heredero, abogada,","paragraph_id":"para_11"},{"text":"applicants at first instance,","paragraph_id":"para_12"},{"text":"European Commission , represented by L. Flynn, J. Carpi Badía and F. Tomat, acting as Agents,","paragraph_id":"para_13"},{"text":"defendant at first instance,","paragraph_id":"para_14"},{"text":"Federal Republic of Germany , represented initially by J. Möller and P.‑L. Krüger, and subsequently by J. Möller, acting as Agents,","paragraph_id":"para_15"},{"text":"French Republic,","paragraph_id":"para_16"},{"text":"interveners at first instance,","paragraph_id":"para_17"},{"text":"THE COURT (Third Chamber),","paragraph_id":"para_18"},{"text":"composed of C. Lycourgos, President of the Chamber, O. Spineanu-Matei, S. Rodin (Rapporteur), N. Piçarra and N. Fenger, Judges,","paragraph_id":"para_19"},{"text":"Advocate General: A. Biondi,","paragraph_id":"para_20"},{"text":"Registrar: M. Longar, Administrator,","paragraph_id":"para_21"},{"text":"having regard to the written procedure and further to the hearing on 7 May 2025,","paragraph_id":"para_22"},{"text":"after hearing the Opinion of the Advocate General at the sitting on 16 October 2025,","paragraph_id":"para_23"},{"text":"gives the following","paragraph_id":"para_24"},{"text":"Judgment","paragraph_id":"para_25"},{"text":"1","paragraph_id":"para_26"},{"text":"By its appeal, Deutsche Lufthansa AG (‘DLH’) seeks to have set aside the judgment of the General Court of the European Union of 10 May 2023, Ryanair and Condor Flugdienst v Commission (Lufthansa; COVID-19) ( T‑34/21 and T‑87/21 , the judgment under appeal, EU:T:2023:248 ), by which the General Court …","paragraph_id":"para_27"},{"text":"Legal context","paragraph_id":"para_28"},{"text":"Regulation (EEC) No 95/93","paragraph_id":"para_29"},{"text":"2","paragraph_id":"para_30"},{"text":"Article 2 of Council Regulation (EEC) No 95/93 of 18 January 1993 on common rules for the allocation of slots at Community airports ( OJ 1993 L 14, p. 1 ), as amended by Regulation (EC) No 793/2004 of the European Parliament and of the Council of 21 April 2004 ( OJ 2004 L 138, p. 50 ), provides:","paragraph_id":"para_31"},{"text":"‘For the purpose of this Regulation:","paragraph_id":"para_32"},{"text":"(a)","paragraph_id":"para_33"},{"text":"“slot” shall mean the permission given by a coordinator in accordance with this Regulation to use the full range of airport infrastructure necessary to operate an air service at a coordinated airport on a specific date and time for the purpose of landing or take-off as allocated by a coordinator in accordance with this Regulation;","paragraph_id":"para_34"},{"text":"…’","paragraph_id":"para_35"},{"text":"The Temporary Framework","paragraph_id":"para_36"},{"text":"3","paragraph_id":"para_37"},{"text":"The Communication from the European Commission on the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak (2020/C‑91 1/01, OJ 2020 C 91 I, p. 1) was published on 20 March 2020 in the Official Journal of the European Union and has been amended seven time …","paragraph_id":"para_38"},{"text":"‘3.11. Recapitalisation measures","paragraph_id":"para_39"},{"text":"44.","paragraph_id":"para_40"},{"text":"This Temporary Framework sets out the criteria under EU State aid rules, based on which Member States may provide public support in the form of equity and/or hybrid capital instruments to undertakings facing financial difficulties due to the COVID-19 outbreak … It aims at ensuring that the disruptio …","paragraph_id":"para_41"},{"text":"…","paragraph_id":"para_42"},{"text":"3.11.2. Eligibility and entry conditions","paragraph_id":"para_43"},{"text":"49.","paragraph_id":"para_44"},{"text":"The COVID-19 recapitalisation measure must fulfil the following conditions:","paragraph_id":"para_45"},{"text":"(a)","paragraph_id":"para_46"},{"text":"without the State intervention the beneficiary would go out of business or would face serious difficulties to maintain its operations. Such difficulties may be shown by the deterioration of, in particular, the beneficiary's debt to equity ratio or similar indicators;","paragraph_id":"para_47"},{"text":"…","paragraph_id":"para_48"},{"text":"(c)","paragraph_id":"para_49"},{"text":"the beneficiary is not able to find financing on the markets at affordable terms and the horizontal measures existing in the Member State concerned to cover liquidity needs are insufficient to ensure its viability; …","paragraph_id":"para_50"},{"text":"…","paragraph_id":"para_51"},{"text":"51.","paragraph_id":"para_52"},{"text":"The requirements of this section and sections 3.11.4, 3.11.5, 3.11.6 and 3.11.7 apply to both COVID-19 recapitalisation schemes and individual aid measures. When approving a scheme, the Commission will request the separate notification of individual aid above the threshold of EUR 250 million. In rel …","paragraph_id":"para_53"},{"text":"…","paragraph_id":"para_54"},{"text":"3.11.4. Amount of the recapitalisation","paragraph_id":"para_55"},{"text":"54.","paragraph_id":"para_56"},{"text":"In order to ensure proportionality of the aid, the amount of the COVID-19 recapitalisation must not exceed the minimum needed to ensure the viability of the beneficiary, and should not go beyond restoring the capital structure of the beneficiary to the one predating the COVID-19 outbreak, i.e. the situation on 31 December 2019. In assessing the proportionality of the aid, State aid received or planned in the context of the COVID-19 outbreak shall be taken into account.","paragraph_id":"para_57"},{"text":"…","paragraph_id":"para_58"},{"text":"3.11.5. Remuneration and exit of the State","paragraph_id":"para_59"},{"text":"General principles","paragraph_id":"para_60"},{"text":"…","paragraph_id":"para_61"},{"text":"59.","paragraph_id":"para_62"},{"text":"As an alternative to the remuneration methodologies set out below, Member States may notify schemes or individual measures where the remuneration methodology is adapted in accordance with the features and seniority of the capital instrument provided they overall lead to a similar outcome with regard to the incentive effects on the exit of the State and a similar overall impact on the State’s remuneration.","paragraph_id":"para_63"},{"text":"Remuneration of equity instruments","paragraph_id":"para_64"},{"text":"60.","paragraph_id":"para_65"},{"text":"A capital injection by the State, or an equivalent intervention, shall be conducted at a price that does not exceed the average share price of the beneficiary over the 15 days preceding the request for the capital injection. If the beneficiary is not a publicly listed company, an estimate of its market value should be established by an independent expert or by other proportionate means.","paragraph_id":"para_66"},{"text":"61.","paragraph_id":"para_67"},{"text":"Any recapitalisation measure shall include a step-up mechanism increasing the remuneration of the State, to incentivise the beneficiary to buy back the State capital injections This increase in remuneration can take the form of additional shares … granted to the State or other mechanisms, and should …","paragraph_id":"para_68"},{"text":"(a)","paragraph_id":"para_69"},{"text":"Four years after the COVID-19 equity injection, if the State has not sold at least 40 percent of its equity participation resulting from the COVID-19 equity injection, the step-up mechanism will be activated.","paragraph_id":"para_70"},{"text":"(b)","paragraph_id":"para_71"},{"text":"Six years after the COVID-19 equity injection, if the State has not sold in full its equity participation resulting from the State’s COVID-19 equity injection, the step-up mechanism will again be activated …","paragraph_id":"para_72"},{"text":"If the beneficiary is not a publicly listed company, Member States may decide to implement each of the two steps one year later, i.e. five years and seven years after granting of the COVID-19 equity injection, respectively.","paragraph_id":"para_73"},{"text":"62.","paragraph_id":"para_74"},{"text":"The Commission may accept alternative mechanisms, provided they lead overall to a similar outcome with regard to the incentive effects on the exit of the State and have a similar impact overall on the State’s remuneration.","paragraph_id":"para_75"},{"text":"63.","paragraph_id":"para_76"},{"text":"The beneficiary should, have at any time, the possibility to buy back the equity stake that the State has acquired. To ensure that the State receives appropriate remuneration for the investment, the buy-back price should be the higher amount of (i) the nominal investment by the State increased by an annual interest remuneration 200 basis points higher than presented in the table below … or (ii) the market price at the moment of the buy-back.","paragraph_id":"para_77"},{"text":"…","paragraph_id":"para_78"},{"text":"Remuneration of hybrid capital instruments","paragraph_id":"para_79"},{"text":"…","paragraph_id":"para_80"},{"text":"67.","paragraph_id":"para_81"},{"text":"The conversion of hybrid capital instruments into equity shall be conducted at 5 percent or more below TERP (Theoretical Ex-Rights Price) at the time of the conversion.","paragraph_id":"para_82"},{"text":"68.","paragraph_id":"para_83"},{"text":"After conversion into equity, a step-up mechanism must be included to increase the remuneration of the State, to incentivise the beneficiaries to buy back the State capital injections. If the equity resulting from the State’s COVID-19 intervention is still owned by the State two years after the conv …","paragraph_id":"para_84"},{"text":"69.","paragraph_id":"para_85"},{"text":"Member States may choose a pricing formula that includes additional step-up or payback clauses. Such features should be designed so that they encourage an early end to the State’s recapitalisation support of the beneficiary. The Commission may also accept alternative pricing methodologies, provided they lead to remunerations that are higher than or similar to those resulting from the above methodology.","paragraph_id":"para_86"},{"text":"70.","paragraph_id":"para_87"},{"text":"Since the nature of hybrid instruments varies significantly, the Commission does not provide guidance for all types of instruments. Hybrid instruments shall in any event follow the principles mentioned above, with remuneration reflecting the risk of the particular instruments.","paragraph_id":"para_88"},{"text":"…","paragraph_id":"para_89"},{"text":"72.","paragraph_id":"para_90"},{"text":"If the beneficiary of a COVID-19 recapitalisation measure above EUR 250 million is an undertaking with significant market power on at least one of the relevant markets in which it operates, Member States must propose additional measures to preserve effective competition in those markets. …’","paragraph_id":"para_91"},{"text":"The background to the dispute and the decision at issue","paragraph_id":"para_92"},{"text":"4","paragraph_id":"para_93"},{"text":"The background to the dispute, as set out in the judgment under appeal, may be summarised as follows.","paragraph_id":"para_94"},{"text":"5","paragraph_id":"para_95"},{"text":"DLH is the parent company of the Lufthansa Group, which, inter alia, comprises the airlines Lufthansa Passenger Airlines, Brussels Airlines SA/NV, Austrian Airlines AG, Swiss International Air Lines Ltd and Edelweiss Air AG.","paragraph_id":"para_96"},{"text":"6","paragraph_id":"para_97"},{"text":"On 12 June 2020, the Federal Republic of Germany, in accordance with Article 108(3) TFEU, notified the European Commission of a planned individual aid measure in the form of a recapitalisation of EUR 6 billion for DLH (‘the measure at issue’).","paragraph_id":"para_98"},{"text":"7","paragraph_id":"para_99"},{"text":"Based on Article 107(3)(b) TFEU and the Temporary Framework, The measure at issue was intended to restore the balance sheet position and liquidity of the undertakings in the Lufthansa Group in the exceptional situation caused by the COVID-19 pandemic. The aid was financed and managed for the German …","paragraph_id":"para_100"},{"text":"8","paragraph_id":"para_101"},{"text":"The measure at issue consisted of the following three elements:","paragraph_id":"para_102"},{"text":"–","paragraph_id":"para_103"},{"text":"an equity participation of EUR 306 044 326.40 (‘the equity participation’);","paragraph_id":"para_104"},{"text":"–","paragraph_id":"para_105"},{"text":"a ‘silent participation’ of EUR 4 693 955 673.60, which was a hybrid capital instrument, treated as equity under international accounting standards (‘Silent Participation I’); and","paragraph_id":"para_106"},{"text":"–","paragraph_id":"para_107"},{"text":"a ‘silent participation’ of EUR 1 billion with the features of a convertible debt instrument (‘Silent Participation II’).","paragraph_id":"para_108"},{"text":"9","paragraph_id":"para_109"},{"text":"The measure at issue was part of a wider series of support measures for the Lufthansa Group, which may be summarised, at the time the decision at issue was adopted, as follows:","paragraph_id":"para_110"},{"text":"–","paragraph_id":"para_111"},{"text":"a State guarantee of 80% on a loan of EUR 3 billion which the Federal Republic of Germany intended to grant to DLH under an aid scheme already approved by the Commission (Commission Decision C(2020) 1886 final of 22 March 2020 on State Aid SA.56714 (2020/N) – Germany – COVID-19 measures);","paragraph_id":"para_112"},{"text":"–","paragraph_id":"para_113"},{"text":"a State guarantee of 90% on a loan of EUR 300 million which the Republic of Austria intended to grant to Austrian Airlines under an aid scheme already approved by the Commission (Commission Decision C(2020) 2354 final of 8 April 2020 on State aid SA.56840 (2020/N) – Austria – COVID-19: Austrian liquidity assistance scheme);","paragraph_id":"para_114"},{"text":"–","paragraph_id":"para_115"},{"text":"a loan of EUR 150 million, which the Republic of Austria planned to grant to Austrian Airlines to compensate it for the damage resulting from the cancellation or rescheduling of its flights in the context of the COVID-19 pandemic;","paragraph_id":"para_116"},{"text":"–","paragraph_id":"para_117"},{"text":"EUR 250 million in liquidity support and a loan of EUR 40 million which the Kingdom of Belgium planned to grant to Brussels Airlines; and","paragraph_id":"para_118"},{"text":"–","paragraph_id":"para_119"},{"text":"a State guarantee of 85% on a loan of EUR 1.4 billion granted by the Swiss Confederation to Swiss International Air Lines and Edelweiss Air.","paragraph_id":"para_120"},{"text":"10","paragraph_id":"para_121"},{"text":"On 25 June 2020, the Commission adopted the decision at issue, by which, after finding that the measure at issue constituted ‘State aid’ within the meaning of Article 107(1) TFEU and assessing its compatibility with the internal market in the light of the Temporary Framework, it decided that that measure was compatible with the internal market under Article 107(3)(b) TFEU and therefore it did not raise any objections to it.","paragraph_id":"para_122"},{"text":"The procedure before the General Court and the judgment under appeal","paragraph_id":"para_123"},{"text":"11","paragraph_id":"para_124"},{"text":"By applications lodged at the Registry of the General Court on 22 January and 12 February 2021 respectively, Ryanair DAC (‘Ryanair’) and Condor Flugdienst GmbH (‘Condor’) brought actions for annulment of the decision at issue.","paragraph_id":"para_125"},{"text":"12","paragraph_id":"para_126"},{"text":"In support of its action in Case T‑34/21, Ryanair raised five pleas in law alleging, first, misapplication of the Temporary Framework and misuse of powers; second, misapplication of Article 107(3)(b) TFEU; third, infringement of certain provisions of the FEU Treaty and of general principles of EU la …","paragraph_id":"para_127"},{"text":"13","paragraph_id":"para_128"},{"text":"In support of its action in Case T‑87/21, Condor raised three pleas in law alleging, first, failure by the Commission to fulfil its obligation to initiate the formal investigation procedure provided for in Article 108(2) TFEU; second, a manifest error of assessment in that the Commission found that the measure at issue was compatible with the internal market under Article 107(3)(b) TFEU; and, third, infringement of the obligation to state reasons.","paragraph_id":"para_129"},{"text":"14","paragraph_id":"para_130"},{"text":"As a preliminary matter, the General Court, in paragraphs 15 to 67 of the judgment under appeal, found that the actions brought by Ryanair and Condor were admissible, considering, first, that they were interested parties with a legal interest in safeguarding the procedural rights which they derived …","paragraph_id":"para_131"},{"text":"15","paragraph_id":"para_132"},{"text":"Next, when assessing the actions on the merits in paragraphs 68 to 503 of the judgment under appeal, the General Court, in the first place, proceeded in paragraphs 70 and 71 thereof to group together the pleas in law made in support of the actions. In particular, it found that all of the questions r …","paragraph_id":"para_133"},{"text":"16","paragraph_id":"para_134"},{"text":"In the second place, in paragraphs 73 to 87 of the judgment under appeal, the General Court made preliminary observations, first, on the intensity of the review which the EU Courts conduct in respect of the complex economic assessments carried out by the Commission in the field of State aid when it …","paragraph_id":"para_135"},{"text":"17","paragraph_id":"para_136"},{"text":"In the third place, the General Court held, when assessing in paragraphs 88 to 503 of the judgment under appeal the pleas and issues referred to in paragraph 15 above, that the decision at issue was vitiated by errors of law as regards:","paragraph_id":"para_137"},{"text":"–","paragraph_id":"para_138"},{"text":"the eligibility of the beneficiary concerned for the aid at issue under point 49(c) of the Temporary Framework, as referred to in the first part of the first plea in Case T‑34/21 and the second part of the first plea in Case T‑87/21 (paragraphs 112 to 138 of the judgment under appeal);","paragraph_id":"para_139"},{"text":"–","paragraph_id":"para_140"},{"text":"the absence of a step-up mechanism to increase the remuneration of the State or a similar mechanism under points 61, 62, 68 and 70 of the Temporary Framework, as referred to in the fourth part of the first plea in Case T‑34/21 (paragraphs 242 to 271 of the judgment under appeal);","paragraph_id":"para_141"},{"text":"–","paragraph_id":"para_142"},{"text":"the price of the shares at the time of conversion of Silent Participation II, under point 67 of the Temporary Framework, covered by the fourth part of the first plea in Case T‑34/21 (paragraphs 272 to 288 of the judgment under appeal);","paragraph_id":"para_143"},{"text":"–","paragraph_id":"para_144"},{"text":"the existence of SMP at the airports where DLH has a base (‘relevant airports’), other than at Frankfurt (Germany) and Munich (Germany) airports, and, in any event, at Düsseldorf (Germany) and Vienna (Austria) airports, during the IATA 2019 summer season, referred to in the fifth part of the first plea in Case T‑34/21 and the first part of the first plea in Case T‑87/21 (paragraphs 373 to 412 of the judgment under appeal);","paragraph_id":"para_145"},{"text":"–","paragraph_id":"para_146"},{"text":"aspects of the commitments referred to in the fifth part of the first plea in Case T‑34/21 and the first part of the first plea in Case T‑87/21 (paragraphs 467 to 480 and 494 to 502 of the judgment under appeal).","paragraph_id":"para_147"},{"text":"18","paragraph_id":"para_148"},{"text":"Consequently, the General Court, after finding in paragraph 505 of the judgment under appeal that each of those errors was, in itself, capable of justifying the annulment of the decision at issue, annulled that decision, without examining the other pleas and complaints put forward by the appellants.","paragraph_id":"para_149"},{"text":"Forms of order sought by the parties to the appeal","paragraph_id":"para_150"},{"text":"19","paragraph_id":"para_151"},{"text":"By its appeal, DLH claims that the Court of Justice should:","paragraph_id":"para_152"},{"text":"–","paragraph_id":"para_153"},{"text":"set aside the judgment under appeal;","paragraph_id":"para_154"},{"text":"–","paragraph_id":"para_155"},{"text":"dismiss the actions at first instance; and","paragraph_id":"para_156"},{"text":"–","paragraph_id":"para_157"},{"text":"order Ryanair and Condor to pay the costs, both at first instance and on appeal.","paragraph_id":"para_158"},{"text":"20","paragraph_id":"para_159"},{"text":"Ryanair and Condor contend that the Court should:","paragraph_id":"para_160"},{"text":"–","paragraph_id":"para_161"},{"text":"dismiss the appeal; and","paragraph_id":"para_162"},{"text":"–","paragraph_id":"para_163"},{"text":"order the appellant to pay the costs.","paragraph_id":"para_164"},{"text":"21","paragraph_id":"para_165"},{"text":"The Commission contends that the Court should:","paragraph_id":"para_166"},{"text":"–","paragraph_id":"para_167"},{"text":"set aside the judgment under appeal; and","paragraph_id":"para_168"},{"text":"–","paragraph_id":"para_169"},{"text":"order Ryanair and Condor to pay the costs, both at first instance and on appeal.","paragraph_id":"para_170"},{"text":"22","paragraph_id":"para_171"},{"text":"The Federal Republic of Germany contends that the Court should:","paragraph_id":"para_172"},{"text":"–","paragraph_id":"para_173"},{"text":"set aside the judgment under appeal;","paragraph_id":"para_174"},{"text":"–","paragraph_id":"para_175"},{"text":"order Ryanair and Condor to pay the costs relating to the appeal proceedings; and","paragraph_id":"para_176"},{"text":"–","paragraph_id":"para_177"},{"text":"order Ryanair to pay the costs relating to the proceedings at first instance in Case T‑34/21.","paragraph_id":"para_178"},{"text":"The appeal","paragraph_id":"para_179"},{"text":"23","paragraph_id":"para_180"},{"text":"DLH puts forward six grounds in support of its appeal. The first alleges an error of law, distortion of the facts and breach by the General Court of the limits of its judicial review, in that it held wrongly that the Commission had infringed point 49(c) of the Temporary Framework. The second ground …","paragraph_id":"para_181"},{"text":"The first ground of appeal","paragraph_id":"para_182"},{"text":"Arguments of the parties","paragraph_id":"para_183"},{"text":"24","paragraph_id":"para_184"},{"text":"By its first ground of appeal, which is divided into three parts, DLH complains that the General Court, in paragraphs 112 to 138 of the judgment under appeal, erred in law, distorted the facts and disregarded the limits of its judicial review by holding that the Commission had infringed point 49(c) …","paragraph_id":"para_185"},{"text":"25","paragraph_id":"para_186"},{"text":"By the first part of the first ground of appeal, DLH submits that by finding, in paragraph 125 of the judgment under appeal, that paragraph 22 of the decision at issue was based ‘on a false premiss, that the financing that can be obtained on the markets must necessarily cover all the beneficiary’s n …","paragraph_id":"para_187"},{"text":"26","paragraph_id":"para_188"},{"text":"By the second part of the first ground of appeal, DLH complains that the General Court erred in law in finding, in paragraph 125 et seq. of the judgment under appeal, that the Commission was required to assess, at the stage of analysing eligibility under point 49(c) of the Temporary Framework, whether a non-negligible part of a beneficiary’s funding needs could be met by financing from the markets.","paragraph_id":"para_189"},{"text":"27","paragraph_id":"para_190"},{"text":"First, such an interpretation is contradicted by the broad and open wording of point 49(c) of the Temporary Framework.","paragraph_id":"para_191"},{"text":"28","paragraph_id":"para_192"},{"text":"Second, it is apparent from that wording that the legal test to be applied is whether a beneficiary is not able to find financing on the markets at affordable terms and whether the national measures to cover its liquidity needs are insufficient to ensure its viability. Accordingly, it would be possible to take into consideration the entirety of the needs for liquidity expressed by the beneficiary.","paragraph_id":"para_193"},{"text":"29","paragraph_id":"para_194"},{"text":"Third, in paragraph 129 of the judgment under appeal, the General Court disregarded the purpose of point 49(c) of the Temporary Framework, namely to prevent the excessive use of public resources, and erred, in paragraph 130 of the judgment under appeal, by transposing the principle of the minimum ne …","paragraph_id":"para_195"},{"text":"30","paragraph_id":"para_196"},{"text":"By the third part of the first ground of appeal, DLH complains, first, that the General Court erred in law and exceeded the limits of its judicial review by finding, in paragraphs 117 and 131 to 135 of the judgment under appeal, that the Commission had not taken into account all the evidence require …","paragraph_id":"para_197"},{"text":"31","paragraph_id":"para_198"},{"text":"The Federal Republic of Germany and the Commission in essence support the arguments put forward by DLH in its first ground of appeal and argue that that ground should be upheld.","paragraph_id":"para_199"},{"text":"32","paragraph_id":"para_200"},{"text":"Ryanair and Condor dispute those arguments and submit that the first ground of appeal should be rejected as inadmissible, at least in part, with respect to the third part thereof, and, in Ryanair’s view, also with respect to the first part. In any event, according to those parties, that ground must …","paragraph_id":"para_201"},{"text":"Findings of the Court","paragraph_id":"para_202"},{"text":"33","paragraph_id":"para_203"},{"text":"As a preliminary matter, it should be observed that point 49(c) of the Temporary Framework makes eligibility for a recapitalisation measure subject to the condition, first, that the beneficiary of a recapitalisation measure is not able to find financing on the markets at affordable terms and, second, that the horizontal measures existing in the Member State concerned to cover the liquidity needs of that beneficiary are insufficient to ensure its viability.","paragraph_id":"para_204"},{"text":"34","paragraph_id":"para_205"},{"text":"It is apparent from reading paragraphs 125 to 132 of the judgment under appeal as a whole that the General Court interpreted point 49(c) as meaning that, in order to determine whether a beneficiary satisfies that condition, the Commission must examine whether it may finance a non-negligible part of its needs on the markets or on the basis of those horizontal measures.","paragraph_id":"para_206"},{"text":"35","paragraph_id":"para_207"},{"text":"In support of that reasoning, the General Court observed, first, in paragraph 129 of the judgment under appeal, that the purpose of point 49(c) of the Temporary Framework was to limit State intervention solely to those cases where the beneficiary is unable to obtain financing on the financial market …","paragraph_id":"para_208"},{"text":"36","paragraph_id":"para_209"},{"text":"In that regard, first, it is apparent from a literal interpretation of point 49(c) of the Temporary Framework as a whole that it aims to exclude from the scope of the beneficiaries of a recapitalisation measure those undertakings which could, without such a measure, in fact obtain sufficient financing on the markets or through the horizontal measures existing in the Member State concerned.","paragraph_id":"para_210"},{"text":"37","paragraph_id":"para_211"},{"text":"Second, it should be observed that point 49(c) is included in section 3.11.2 of the Temporary Framework, relating to eligibility and entry conditions. The condition referred to in paragraph 33 above thus appears among other conditions, such as the one referred to in point 49(a) of the Temporary Fram …","paragraph_id":"para_212"},{"text":"38","paragraph_id":"para_213"},{"text":"That interpretation is supported by the third sentence of point 51 of the Temporary Framework, which, although concerning only notification by Member States of individual aid above the threshold of EUR 250000000, reproduces and makes explicit the condition in point 49(c) of the Temporary Framework by stating that the existing financing of the beneficiary of the aid or the horizontal measures to cover its liquidity needs should be insufficient to ensure its viability.","paragraph_id":"para_214"},{"text":"39","paragraph_id":"para_215"},{"text":"Third, it is apparent from point 54 of the Temporary Framework, included in sub-section 3.11.4 thereof, entitled ‘Amount of the recapitalisation’, that, in order to ensure that aid complies with the principle of proportionality, the amount of the measure must not exceed the minimum needed to ensure …","paragraph_id":"para_216"},{"text":"40","paragraph_id":"para_217"},{"text":"It thus follows from a literal and contextual interpretation of point 49(c) of the Temporary Framework that the latter must be interpreted as meaning that an undertaking’s eligibility for a recapitalisation measure is conditional on the existence of a need for financing, while it is not necessary, a …","paragraph_id":"para_218"},{"text":"41","paragraph_id":"para_219"},{"text":"While the General Court was correct in finding that the purpose of point 49(c) of the Temporary Framework is to limit the provision of recapitalisation measures solely to undertakings with an unsatisfied need for financing, the considerations in paragraphs 129 and 130 of the judgment under appeal, a …","paragraph_id":"para_220"},{"text":"42","paragraph_id":"para_221"},{"text":"It thus follows that the General Court erred in law by finding, in paragraphs 132 and 137 of the judgment under appeal, that the Commission, since it had not assessed whether the beneficiary could have raised at least part of the necessary financing on the markets, had failed to take into account all of the relevant evidence for the purpose of examining the condition in point 49(c) of the Temporary Framework.","paragraph_id":"para_222"},{"text":"43","paragraph_id":"para_223"},{"text":"Furthermore, although the General Court found, in paragraphs 123 and 124 of the judgment under appeal, that the Commission had failed to assess whether DLH had collateral that enabled it to obtain financing on the markets that met its needs, it is apparent from the findings of fact in paragraph 119 …","paragraph_id":"para_224"},{"text":"44","paragraph_id":"para_225"},{"text":"It follows from the foregoing that the second part of the first ground of appeal is well founded. Accordingly, that ground of appeal must be upheld, there being no need to examine its other parts or, therefore, the related admissibility questions.","paragraph_id":"para_226"},{"text":"The second ground of appeal","paragraph_id":"para_227"},{"text":"Arguments of the parties","paragraph_id":"para_228"},{"text":"45","paragraph_id":"para_229"},{"text":"By its second ground of appeal, which has two parts, DLH submits that the General Court erred in law in finding, in paragraphs 242 to 271 of the judgment under appeal, that the Commission, inter alia, had infringed points 61, 62, 68 and 70 of the Temporary Framework by failing to require that the equity participation and Silent Participation II be accompanied by a step-up mechanism increasing the remuneration of the State or a mechanism that was similar.","paragraph_id":"para_230"},{"text":"46","paragraph_id":"para_231"},{"text":"By the first part of the second ground of appeal, DLH submits that, contrary to the General Court’s findings in paragraphs 252 to 263 of the judgment under appeal, the Commission was entitled to find that the equity participation, considering the overall structure of the recapitalisation measures and their tightly interconnected components, was accompanied by a mechanism that was similar to that of the step-up to increase the remuneration of the State.","paragraph_id":"para_232"},{"text":"47","paragraph_id":"para_233"},{"text":"First, the approach followed by the General Court in that regard, with respect to interpreting point 62 of the Temporary Framework, was erroneous and formalistic, in that it found, inter alia, in paragraph 263 of the judgment under appeal, that the Commission could not take into account the combined …","paragraph_id":"para_234"},{"text":"48","paragraph_id":"para_235"},{"text":"Second, DLH submits that the General Court erred in finding, in paragraphs 254 to 256 of the judgment under appeal, that the substantial discount at which the State had entered DLH’s equity did not have a sufficiently close connection with the subject matter of a step-up mechanism to increase the St …","paragraph_id":"para_236"},{"text":"49","paragraph_id":"para_237"},{"text":"By the second part of the second ground of appeal, DLH submits that the General Court erred in law in finding, in paragraph 265 et seq. of the judgment under appeal, that Silent Participation II, after its conversion into equity, was likewise not accompanied by an ‘alternative step-up mechanism to i …","paragraph_id":"para_238"},{"text":"50","paragraph_id":"para_239"},{"text":"In any event, the Commission was entitled to conclude, in paragraph 161 of the decision at issue, that the remuneration levels of Silent Participations I and II, the significant discount, including the effects of a higher, ‘undesirable’ shareholding, and the additional built-in exit incentives, refl …","paragraph_id":"para_240"},{"text":"51","paragraph_id":"para_241"},{"text":"The Federal Republic of Germany and the Commission in essence support the arguments put forward by DLH in its second ground of appeal and submit that it should be upheld.","paragraph_id":"para_242"},{"text":"52","paragraph_id":"para_243"},{"text":"Ryanair and Condor dispute those arguments, the latter company maintaining that the second ground of appeal must be rejected as, at least in part, inadmissible on account of the fact that, contrary to what DLH claims, the Commission does not have broad discretion under the Temporary Framework and th …","paragraph_id":"para_244"},{"text":"Findings of the Court","paragraph_id":"para_245"},{"text":"53","paragraph_id":"para_246"},{"text":"As a preliminary point, it is necessary to reject Condor’s complaint that the second ground of appeal is in part inadmissible. By that ground of appeal, DLH complains, in essence, that the General Court erred in law by encroaching on the broad discretion which, in DLH’s view, is enjoyed by the Commi …","paragraph_id":"para_247"},{"text":"54","paragraph_id":"para_248"},{"text":"As to the substance, it should be observed, as regards equity instruments, that it is apparent from point 61 of the Temporary Framework that any recapitalisation measure is to include a step-up mechanism increasing the remuneration of the State, to incentivise the beneficiary to buy back the State c …","paragraph_id":"para_249"},{"text":"55","paragraph_id":"para_250"},{"text":"As regards hybrid capital instruments, it is apparent from point 68 of the Temporary Framework that after conversion into equity, a step-up mechanism to increase the remuneration of the State must be included, to incentivise beneficiaries to buy back the State capital injections. If the equity resul …","paragraph_id":"para_251"},{"text":"56","paragraph_id":"para_252"},{"text":"In that regard, it is apparent from settled case-law, referred to by the General Court in paragraphs 74 and 75 of the judgment under appeal, that, for the purpose of assessing the compatibility of aid measures with the internal market under Article 107(3) TFEU, the Commission enjoys wide discretion, …","paragraph_id":"para_253"},{"text":"57","paragraph_id":"para_254"},{"text":"It follows that judicial review must, in that regard, be confined to establishing that the rules of procedure and the rules relating to the duty to give reasons have been complied with, verifying that the facts relied on are accurate, and that there has been no manifest error of assessment or misuse of powers (see, to that effect, judgment of 22 December 2008, Régie Networks, C‑333/07 , EU:C:2008:764 , paragraph  78 and the case-law cited).","paragraph_id":"para_255"},{"text":"58","paragraph_id":"para_256"},{"text":"However, by adopting guidelines, such as those set out in the Temporary Framework, in order to establish the criteria on the basis of which the Commission proposes to assess the compatibility, with the internal market, of aid envisaged by the Member States, and by announcing, by publishing them, tha …","paragraph_id":"para_257"},{"text":"59","paragraph_id":"para_258"},{"text":"It is also apparent from the case-law of the Court of Justice that, while the Commission, in the area of State aid, is bound as a rule by the guidelines that it issues, such as the Temporary Framework, the adoption of such guidelines does not relieve the Commission of its obligation to examine the s …","paragraph_id":"para_259"},{"text":"60","paragraph_id":"para_260"},{"text":"Although, in accordance with the case-law of the Court of Justice cited in paragraph 58 above, the Commission has set a limit on the exercise of its discretion by adopting the Temporary Framework, it must, nevertheless, be stated that that framework explicitly provides, in points 62 and 68, for the possibility of using, in addition to the step-up mechanisms for increasing the remuneration of the State which it details, alternatives which produce similar overall effects.","paragraph_id":"para_261"},{"text":"61","paragraph_id":"para_262"},{"text":"In the light of the criterion of overall similarity set by the Temporary Framework, an alternative mechanism cannot be required to be identical to the mechanism foreseen by the Temporary Framework, whether in its design or in its effects.","paragraph_id":"para_263"},{"text":"62","paragraph_id":"para_264"},{"text":"In addition, it follows from the case-law referred to in paragraphs 56 and 57 above that only a manifest error of assessment by the Commission as to whether an alternative mechanism leads to effects that are similar overall to those produced by the step-up mechanisms to increase the remuneration of the State detailed in points 61 and 68 of the Temporary Framework may lead to the annulment of a decision of that institution by an EU Court.","paragraph_id":"para_265"},{"text":"63","paragraph_id":"para_266"},{"text":"In such an exercise, a manifest error may be established by evidence which renders implausible the Commission’s assessment of the facts in its decision. By contrast, such a plea must be rejected if, despite the evidence adduced by the applicants, the contested assessment does not appear to be vitiat …","paragraph_id":"para_267"},{"text":"64","paragraph_id":"para_268"},{"text":"However, the European Union judicature must, inter alia, establish not only whether the evidence relied on is factually accurate, reliable and consistent but also whether that evidence contains all the relevant information which must be taken into account in order to assess a complex situation and w …","paragraph_id":"para_269"},{"text":"65","paragraph_id":"para_270"},{"text":"In addition, the General Court, more generally, cannot substitute its own reasoning for that of the author of the contested act (see, to that effect, judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P , EU:C:2023:712 , paragraph  117 and the case-law cited).","paragraph_id":"para_271"},{"text":"66","paragraph_id":"para_272"},{"text":"In paragraphs 267 and 268 of the judgment under appeal, the General Court held that the equity participation and Silent Participation II, at the time of their conversion into equity, were not accompanied by a step-up mechanism to increase the State’s remuneration or any similar mechanism under points 62 and 68 of the Temporary Framework, the content of which is set out in paragraphs 54 and 55 above.","paragraph_id":"para_273"},{"text":"67","paragraph_id":"para_274"},{"text":"In that regard, it is apparent from paragraph 248 of the judgment under appeal that the Commission, in order to find that the overall structure of the mechanism constituted, in accordance with point 62 of the Temporary Framework, a mechanism that was comparable to a step-up mechanism to increase the …","paragraph_id":"para_275"},{"text":"68","paragraph_id":"para_276"},{"text":"With a view to ruling on those grounds, the General Court concluded, first, in paragraphs 253 to 257 of the judgment under appeal, that the discount of 71.9% in the share price, which, according to the decision at issue, made it possible to offer remuneration that was higher than that which the Fede …","paragraph_id":"para_277"},{"text":"69","paragraph_id":"para_278"},{"text":"The General Court thus rejected each of the arguments put forward by the Commission in the decision at issue, first, because of their lack of connection with the step-up mechanism envisaged and, second, because they related to separate requirements under the Temporary Framework.","paragraph_id":"para_279"},{"text":"70","paragraph_id":"para_280"},{"text":"However, the fact that some of the factors taken into consideration by the Commission under points 62 and 68 of the Temporary Framework might also fall within the scope of other requirements laid down by that framework does not appear, in and of itself, to make them completely irrelevant. It cannot …","paragraph_id":"para_281"},{"text":"71","paragraph_id":"para_282"},{"text":"In that context, the General Court, while finding, in paragraphs 251 and 252 of the judgment under appeal, a failure to put in place either a step-up mechanism to increase the remuneration of the State or alternative mechanisms under points 62 and 68 of the Temporary Framework, did not establish tha …","paragraph_id":"para_283"},{"text":"72","paragraph_id":"para_284"},{"text":"More specifically, it is not apparent from paragraphs 253 to 257 of the judgment under appeal that the conclusion that the significant discount at which the Federal Republic of Germany had acquired DLH’s shares could contribute to producing incentive effects on the exit of the State from the capital was implausible.","paragraph_id":"para_285"},{"text":"73","paragraph_id":"para_286"},{"text":"Nor is it apparent from paragraphs 258 to 269 of the judgment under appeal that the progressive increase in the interest rates providing remuneration for Silent Participations I and II, the increase in the likelihood of a conversion of part of Silent Participation II into equity, or the fact that DL …","paragraph_id":"para_287"},{"text":"74","paragraph_id":"para_288"},{"text":"In addition, the General Court failed to take into consideration the cumulative effects of the various factors taken into account by the Commission to establish the existence of an alternative mechanism to that of the step-up to increase the remuneration of the State, in accordance with points 62 and 68 of the Temporary Framework, whereas it was precisely the combined effects of the various factors referred to in the preceding two paragraphs that that institution relied on.","paragraph_id":"para_289"},{"text":"75","paragraph_id":"para_290"},{"text":"In those circumstances, the General Court failed to demonstrate that the Commission had made a manifest error of assessment in finding that the measure at issue, both with respect to the equity participation and Silent Participation II, was accompanied by alternative mechanisms meeting the requirement of having an overall similarity with a step-up mechanism increasing the remuneration of the State, and it therefore vitiated its judgment by an error of law.","paragraph_id":"para_291"},{"text":"76","paragraph_id":"para_292"},{"text":"It follows from the foregoing that both parts of the second ground of appeal must be upheld.","paragraph_id":"para_293"},{"text":"The third ground of appeal","paragraph_id":"para_294"},{"text":"Arguments of the parties","paragraph_id":"para_295"},{"text":"77","paragraph_id":"para_296"},{"text":"By its third ground of appeal, DLH complains that the General Court erred in law when it found, in paragraphs 272 to 288 of the judgment under appeal, that the Commission had infringed point 67 of the Temporary Framework by taking the view that part of Silent Participation II, namely Silent Particip …","paragraph_id":"para_297"},{"text":"78","paragraph_id":"para_298"},{"text":"In that regard, it argues that the General Court disregarded the fact that the Commission may, under point 59 of the Temporary Framework, accept ‘an alternative to the remuneration methodologies set out below’ and, thereby, also to the option in point 67 of that framework. Since a ‘theoretical ex ri …","paragraph_id":"para_299"},{"text":"79","paragraph_id":"para_300"},{"text":"DLH states that, given the impossibility of calculating a TERP, the Federal Republic of Germany proposed to refer, first, to the minimum issuance price of EUR 2.56 applicable to DLH for the conversion of Silent Participation II-A and, second, to DLH’s market price, using a discount of 5.25% or 10%, …","paragraph_id":"para_301"},{"text":"80","paragraph_id":"para_302"},{"text":"A reference to a TERP was therefore not possible, contrary to what was considered by the General Court in 276 to 279 of the judgment under appeal, such that the Commission had been right to accept an alternative remuneration method under point 59 of the Temporary Framework that led to the same outcome as if a TERP could have been taken into consideration.","paragraph_id":"para_303"},{"text":"81","paragraph_id":"para_304"},{"text":"DLH submits that that conclusion, contrary to what the General Court held in paragraphs 280 to 285 of the judgment under appeal, cannot be called into question by the fact that the decision at issue required, in paragraph 158, that the Federal Republic of Germany seek the agreement of the Commission …","paragraph_id":"para_305"},{"text":"82","paragraph_id":"para_306"},{"text":"The Federal Republic of Germany and the Commission in essence support the arguments put forward by DLH in its third ground of appeal and submit that that ground should be upheld.","paragraph_id":"para_307"},{"text":"83","paragraph_id":"para_308"},{"text":"Ryanair and Condor dispute that line of argument and submit that the third ground of appeal should be rejected as at least in part inadmissible on account of the fact that it seeks to question findings of fact made by the General Court. In any event, according to those parties, that ground must be r …","paragraph_id":"para_309"},{"text":"Findings of the Court","paragraph_id":"para_310"},{"text":"84","paragraph_id":"para_311"},{"text":"It should be observed, as regards the remuneration of hybrid capital instruments, that, under point 67 of the Temporary Framework, the conversion of such instruments into equity is to be conducted at 5% or more below the TERP at the time of the conversion.","paragraph_id":"para_312"},{"text":"85","paragraph_id":"para_313"},{"text":"In paragraph 275 of the judgment under appeal, the General Court first observed that the Commission had found in the decision at issue that part of Silent Participation II, namely Silent Participation II-A, could be converted into shares at a fixed price of EUR 2.56 per share, while another part of …","paragraph_id":"para_314"},{"text":"86","paragraph_id":"para_315"},{"text":"In paragraphs 276 to 278 of the judgment under appeal, the General Court then held that the price of the shares at the time of conversion was not determined on the basis of the TERP, whether as regards Silent Participation II-A, since the fixed price per share applied did not correspond to the method set out in point 67 of the Temporary Framework, or as regards Silent Participation II-B, for which the price was based on the trading price at the time of conversion.","paragraph_id":"para_316"},{"text":"87","paragraph_id":"para_317"},{"text":"Lastly, the General Court found that the Commission had not justified the use of an alternative method of calculation and that, by providing for an ex post authorisation scheme in the event of a non-compliant price, the Commission had merely postponed its decision, contrary to that point 67.","paragraph_id":"para_318"},{"text":"88","paragraph_id":"para_319"},{"text":"In that context, it should be observed that under point 59 of the Temporary Framework, Member States may, as an alternative to the remuneration methodologies set out in points 60 to 70 thereof, notify schemes or individual measures where the methodology for remunerating the State is adapted in accor …","paragraph_id":"para_320"},{"text":"89","paragraph_id":"para_321"},{"text":"Accordingly, DLH is correct when it argues that the Commission was entitled to refer to an alternative mechanism to that described in point 67 of the Temporary Framework, without having to rely on a specific reason or exceptional circumstance for that purpose. However, such an alternative mechanism will comply with the requirements of the Temporary Framework only in so far as it produces a similar overall outcome as the mechanism referred to in point 67.","paragraph_id":"para_322"},{"text":"90","paragraph_id":"para_323"},{"text":"However, it is apparent from paragraphs 277, 278 and 280 to 286 of the judgment under appeal that the General Court found that the alternative method of calculation set out in paragraph 158 of the decision at issue could lead to a price being determined that did not correspond to the prices that wou …","paragraph_id":"para_324"},{"text":"91","paragraph_id":"para_325"},{"text":"The finding of the General Court that the application of that alternative method leads to a different outcome from that of applying the method set out in point 67 of the Temporary Framework is not contested in the present appeal.","paragraph_id":"para_326"},{"text":"92","paragraph_id":"para_327"},{"text":"In that context, the appellant’s argument, based on the fact that a TERP could not be calculated in the present case, cannot succeed.","paragraph_id":"para_328"},{"text":"93","paragraph_id":"para_329"},{"text":"Indeed, other than the fact that it contradicts the decision at issue, which explicitly provides for a comparison between the outcome under the alternative method of calculation and that produced by use of the TERP method, that line of argument ultimately seeks, as Ryanair and Condor claim, to have the Court of Justice itself make findings of fact, without any claim being made that the General Court distorted the evidence presented to it.","paragraph_id":"para_330"},{"text":"94","paragraph_id":"para_331"},{"text":"However, it is clear from established case-law that, in an appeal, the Court of Justice has no jurisdiction to establish the facts or, in principle, to examine the evidence which the General Court accepted in support of those facts. The jurisdiction of the Court of Justice to review the findings of …","paragraph_id":"para_332"},{"text":"95","paragraph_id":"para_333"},{"text":"The third ground of appeal is therefore inadmissible in so far as it asks the Court of Justice to find that the judgment under appeal is vitiated by an error on the ground that it failed to consider the circumstance that a TERP could not be calculated in the present case.","paragraph_id":"para_334"},{"text":"96","paragraph_id":"para_335"},{"text":"Furthermore, contrary to what is maintained by the Commission, the obligation for the Federal Republic of Germany to seek the Commission’s authorisation if the conversion price of the hybrid capital instruments was not in line with the requirement referred to in point 67 of the Temporary Framework, as foreseen in paragraph 158 of the decision at issue, does not suffice to bring that paragraph into line with the requirement in question.","paragraph_id":"para_336"},{"text":"97","paragraph_id":"para_337"},{"text":"Indeed, as the General Court found in paragraph 284 of the judgment under appeal, the Federal Republic of Germany did not commit itself to ensuring that the price would in any event be brought into line with the requirement set out in point 67 of the Temporary Framework, but only to obtain the Commi …","paragraph_id":"para_338"},{"text":"98","paragraph_id":"para_339"},{"text":"It must also be held, as observed by the General Court in paragraphs 280 to 286 of the judgment under appeal, that State aid is subject to a system of prior authorisation under Article 108(3) TFEU, such that an aid measure must be declared compatible with the internal market before it is implemented …","paragraph_id":"para_340"},{"text":"99","paragraph_id":"para_341"},{"text":"In addition, although the Commission maintains that paragraph 158 of the decision at issue only authorises the measure at issue if the conversion price was ultimately in line with point 67 of the Temporary Framework, it must be found that there is no support for such a claim in that paragraph, which foresees an ex post review without any definition of the parameters of that review.","paragraph_id":"para_342"},{"text":"100","paragraph_id":"para_343"},{"text":"It follows that the third ground of appeal must be rejected as in part inadmissible and in part unfounded.","paragraph_id":"para_344"},{"text":"The fourth ground of appeal","paragraph_id":"para_345"},{"text":"Arguments of the parties","paragraph_id":"para_346"},{"text":"101","paragraph_id":"para_347"},{"text":"By its fourth ground of appeal, which has two parts, DLH complains that the General Court erred in law and overstepped the limits of its judicial review by holding, in paragraphs 373 to 412 of the judgment under appeal, that the Commission had made a manifest error of assessment when determining whether DLH held SMP at the relevant airports.","paragraph_id":"para_348"},{"text":"102","paragraph_id":"para_349"},{"text":"By the first part of the fourth ground of appeal, DLH submits, in essence, that the General Court erred in law and overstepped the limits of its judicial review by holding, in paragraphs 373 to 387 of the judgment under appeal, that the Commission had made a manifest error of assessment because it h …","paragraph_id":"para_350"},{"text":"103","paragraph_id":"para_351"},{"text":"In that regard, DLH submits that identifying SMP is subject to a complex economic assessment in respect of which the Commission enjoys broad discretion and that the General Court overstepped the limits of the judicial review it could exercise with regard to the decision which the Commission adopted …","paragraph_id":"para_352"},{"text":"104","paragraph_id":"para_353"},{"text":"In addition, DLH submits that the finding of the General Court in paragraph 379 of the judgment under appeal fails to show that consideration of market shares in terms of frequencies and seats offered would have been more meaningful than the criteria applied by the Commission in order to assess SMP. …","paragraph_id":"para_354"},{"text":"105","paragraph_id":"para_355"},{"text":"By the second part of the fourth ground of appeal, DLH submits, in essence, that the General Court erred in law and exceeded the limits of its judicial review by holding, in paragraphs 388 to 412 of the judgment under appeal, that the Commission had made a manifest error of assessment in finding that DLH did not hold SMP at Düsseldorf and Vienna airports.","paragraph_id":"para_356"},{"text":"106","paragraph_id":"para_357"},{"text":"In that regard, DLH argues that, since the Commission enjoys broad discretion in analysing market data for assessing SMP, the General Court overstepped the limits of its judicial review by substituting its own analysis of that data for that of the Commission. More specifically, the General Court’s r …","paragraph_id":"para_358"},{"text":"107","paragraph_id":"para_359"},{"text":"According to DLH, the Commission was right to find that it did not hold SMP at Düsseldorf and Vienna airports. DLH states that the criteria for assessing SMP with respect to those two airports differ materially from those concerning Frankfurt and Munich airports and do indeed show that DLH did not h …","paragraph_id":"para_360"},{"text":"108","paragraph_id":"para_361"},{"text":"The Federal Republic of Germany and the Commission in essence support the arguments put forward by DLH in its fourth ground of appeal and submit that that ground should be upheld.","paragraph_id":"para_362"},{"text":"109","paragraph_id":"para_363"},{"text":"Ryanair and Condor dispute those arguments and submit that the second part of the fourth ground of appeal must be rejected as at least partially inadmissible because, by that part, DLH is seeking to call into question findings of fact made by the General Court. Ryanair also submits that DLH’s argume …","paragraph_id":"para_364"},{"text":"Findings of the Court","paragraph_id":"para_365"},{"text":"110","paragraph_id":"para_366"},{"text":"As regards the first part of the fourth ground of appeal, it should be observed that, in paragraphs 373 to 387 of the judgment under appeal, the General Court analysed the criteria used by the Commission to assess whether DLH held SMP at the relevant airports.","paragraph_id":"para_367"},{"text":"111","paragraph_id":"para_368"},{"text":"The General Court first observed, in paragraph 373 of the judgment under appeal, that the Commission had stated in paragraph 179 of the decision at issue that it would refer for that purpose to three criteria: first, the slot holdings of the group to which DLH belongs at those airports, defined, in …","paragraph_id":"para_369"},{"text":"112","paragraph_id":"para_370"},{"text":"However, the General Court held in paragraph 378 of the judgment under appeal that other factors, relating to the market shares held by the beneficiary and its competitors on the market for passenger air transport services, were relevant for the purposes of assessing the existence of SMP. In that re …","paragraph_id":"para_371"},{"text":"113","paragraph_id":"para_372"},{"text":"The General Court thus concluded, in paragraph 386 of the judgment under appeal, that, given the importance of market shares for determining the existence of SMP, as referred to in paragraph 383 of the judgment under appeal, the Commission, by failing to take that aspect into consideration, had not taken all the relevant factors into account.","paragraph_id":"para_373"},{"text":"114","paragraph_id":"para_374"},{"text":"In that regard, it should be observed, first, that it is apparent from the definition of the concept of ‘slot’ in Article 2(a) of Regulation (EEC) No 95/93, as amended by Regulation No 793/2004, that that term refers to ‘the permission given by a coordinator … to use the full range of airport infrastructure necessary to operate an air service at a coordinated airport on a specific date and time for the purpose of landing or take-off as allocated by a coordinator’.","paragraph_id":"para_375"},{"text":"115","paragraph_id":"para_376"},{"text":"That definition thus means, in substance, that a slot is the right to operate a flight. Accordingly, the Commission was correct when it established a direct link in the decision at issue between the number of slots held by the beneficiary of the measure at issue and the number of flights that it cou …","paragraph_id":"para_377"},{"text":"116","paragraph_id":"para_378"},{"text":"Second, as regards the criteria based on frequency and the number of seats offered, which the General Court referred to in paragraph 380 of the judgment under appeal and which, in its view, should have been taken into account by the Commission, while it cannot be ruled out that those criteria may co …","paragraph_id":"para_379"},{"text":"117","paragraph_id":"para_380"},{"text":"In those circumstances, where the General Court has failed to establish to the requisite legal standard that the criterion chosen by the Commission, namely the distribution of slots, was manifestly incapable of allowing for a correct assessment of that capacity in the SMP evaluation and rendered the …","paragraph_id":"para_381"},{"text":"118","paragraph_id":"para_382"},{"text":"Third, the General Court likewise failed to demonstrate, in paragraphs 373 to 387 of the judgment under appeal, that the Commission could not justifiably consider that the level of congestion at an airport and the distribution of slots between the various operators active in departures from that air …","paragraph_id":"para_383"},{"text":"119","paragraph_id":"para_384"},{"text":"Accordingly, unlike what was found by the General Court in paragraph 386 of the judgment under appeal, it failed to establish to the requisite legal standard, in accordance with the case-law of the Court of Justice referred to in paragraphs 56 to 64 above, that the Commission had committed a manifes …","paragraph_id":"para_385"},{"text":"120","paragraph_id":"para_386"},{"text":"As regards the second part of the fourth ground of appeal, it should be observed, with respect to its admissibility, first, that infringement by the General Court of its obligation to state reasons and the limits of its judicial review are points of law over which the Court of Justice has jurisdicti …","paragraph_id":"para_387"},{"text":"121","paragraph_id":"para_388"},{"text":"Second, given that the Court of Justice, as observed in paragraph 94 above, has no jurisdiction to establish the facts, it must be observed that, to the extent that DLH seeks to have the Court of Justice verify, on the basis of information which DLH has submitted to it, that the Commission was right …","paragraph_id":"para_389"},{"text":"122","paragraph_id":"para_390"},{"text":"As to the substance, it should be observed that the General Court, after holding, in paragraph 410 of the judgment under appeal, that the Commission had not taken into account all the relevant criteria and had thus committed a manifest error of assessment, added, in paragraph 411 thereof, that in an …","paragraph_id":"para_391"},{"text":"123","paragraph_id":"para_392"},{"text":"In order to reach that conclusion with respect to Düsseldorf airport, the General Court found, first, in paragraph 397 of the judgment under appeal, that the Lufthansa Group’s average slot holding at that airport during the IATA summer 2019 season, namely between 40 and 50%, exceeded the threshold o …","paragraph_id":"para_393"},{"text":"124","paragraph_id":"para_394"},{"text":"Based on reasons that were similar, mutatis mutandis , to those referred to in the preceding paragraph, the General Court deduced, in paragraph 408 of the judgment under appeal, that the Commission could not properly find that the Lufthansa Group did not hold SMP at Vienna airport, at least during the IATA summer 2019 season.","paragraph_id":"para_395"},{"text":"125","paragraph_id":"para_396"},{"text":"In so doing, the General Court failed to have regard to the reasons given in paragraphs 203, 204, 211 and 212 of the decision at issue. However, those reasons explained why the Commission had interpreted the data available to it as failing to establish that Lufthansa Group held SMP at Düsseldorf and …","paragraph_id":"para_397"},{"text":"126","paragraph_id":"para_398"},{"text":"Nevertheless, the General Court, using the same data as the Commission, carried out a new analysis of those data in paragraphs 396 to 408 of the judgment under appeal and, based on an overall assessment thereof, ultimately reached a different conclusion from that of the Commission, without, however, calling into question the latter’s findings in the decision at issue.","paragraph_id":"para_399"},{"text":"127","paragraph_id":"para_400"},{"text":"As a result, the General Court did not confine itself to reviewing whether the Commission had committed a manifest error of assessment, in accordance with the case-law referred to in paragraphs 56 to 64 above, but substituted its own assessment for that of the Commission in a situation, however, where that institution enjoys broad discretion.","paragraph_id":"para_401"},{"text":"128","paragraph_id":"para_402"},{"text":"The second part of the fourth ground of appeal must therefore be upheld, as must, consequently, the fourth ground of appeal in its entirety.","paragraph_id":"para_403"},{"text":"The fifth ground of appeal","paragraph_id":"para_404"},{"text":"Arguments of the parties","paragraph_id":"para_405"},{"text":"129","paragraph_id":"para_406"},{"text":"By its fifth ground of appeal, DLH complains that the General Court erred in law in finding, in paragraphs 467 to 480 of the judgment under appeal, that the Commission had made a manifest error of assessment by excluding certain competitors already based at Frankfurt and Munich airports from the first stage of the slot divestiture procedure.","paragraph_id":"para_407"},{"text":"130","paragraph_id":"para_408"},{"text":"In that regard, DLH submits that while the General Court acknowledged that the Commission had broad discretion to assess whether the commitments entered into were sufficient, it disregarded its own case-law arising from the judgment of 13 May 2015, Niki Luftfahrt v Commission ( T‑162/10 , EU:T:2015: …","paragraph_id":"para_409"},{"text":"131","paragraph_id":"para_410"},{"text":"DLH states that, as the General Court noted in paragraph 421 of the judgment under appeal, the potential competitive effects of State aid are more indirect than those of mergers, since the beneficiary does not acquire a competitor and thereby remove a competitive constraint, but may utilise the addi …","paragraph_id":"para_411"},{"text":"132","paragraph_id":"para_412"},{"text":"Contrary to what the General Court found in paragraph 472 of the judgment under appeal, the Commission specifically stated in paragraphs 226 and 227 of the decision at issue that limiting the slot divestiture procedure to new entrants was beneficial since it would allow structural competition with t …","paragraph_id":"para_413"},{"text":"133","paragraph_id":"para_414"},{"text":"However, the reasoning of the General Court in paragraphs 472 to 477 of the judgment under appeal completely disregarded the fact that the Commission, when having to choose between two different commitment structures, has broad discretion to apply commitments of a narrower scope as long as it may reasonably conclude that the commitments offered are sufficient to address the risks associated, in the present case, with DLH having SMP at Frankfurt and Munich airports.","paragraph_id":"para_415"},{"text":"134","paragraph_id":"para_416"},{"text":"Similarly, when analysing the structure of the market at Frankfurt and Munich airports in paragraphs 473 to 476 of the judgment under appeal, and by referring to an alternative structure that did not exclude existing competitors from the slot divestiture procedure, the General Court substituted its own assessment for that of the Commission. However, that again involved a complex economic analysis.","paragraph_id":"para_417"},{"text":"135","paragraph_id":"para_418"},{"text":"Furthermore, according to DLH, given what was found, in essence, in paragraphs 452 and 463 of the judgment under appeal, the General Court contradicted its own reasoning in holding, in paragraphs 473 to 476 of the judgment under appeal, that carriers with a base at an airport would be in a better position to maintain effective competition.","paragraph_id":"para_419"},{"text":"136","paragraph_id":"para_420"},{"text":"The Federal Republic of Germany and the Commission support, in essence, the arguments put forward by DLH in its fifth ground of appeal and argue that that ground of appeal should be upheld.","paragraph_id":"para_421"},{"text":"137","paragraph_id":"para_422"},{"text":"Ryanair and Condor dispute that line of argument and submit that the fifth ground of appeal should be rejected. They contend, in essence, that the grounds of the judgment under appeal referred to in the present ground should be upheld since the General Court, inter alia, did not exceed the limits of the judicial review which it is required to carry out.","paragraph_id":"para_423"},{"text":"Findings of the Court","paragraph_id":"para_424"},{"text":"138","paragraph_id":"para_425"},{"text":"As a preliminary point, it should be observed that, in accordance with point 72 of the Temporary Framework, if the beneficiary of a recapitalisation measure has SMP on a market, the Member State must propose additional measures to preserve effective competition on that market. In that regard, it is …","paragraph_id":"para_426"},{"text":"139","paragraph_id":"para_427"},{"text":"The General Court held in paragraph 479 of the judgment under appeal that the Commission had failed to examine all the relevant factors relating to the commitments of the Federal Republic of Germany to preserve effective competition on the market concerned, assessed in the light of the structure and …","paragraph_id":"para_428"},{"text":"140","paragraph_id":"para_429"},{"text":"In support of that finding, the General Court, inter alia, indicated in paragraphs 474 to 477 of the judgment under appeal that other measures, consisting, in particular, of the application of other conditions than those foreseen in the commitments of the Federal Republic of Germany for divesting the slots at issue to already established competitors, would be able better to preserve effective competition.","paragraph_id":"para_430"},{"text":"141","paragraph_id":"para_431"},{"text":"In that regard, it should be observed that it is apparent from the case-law of the Court of Justice referred to in paragraphs 56 to 64 above that the Commission has broad discretion to determine whether additional measures proposed by Member States are able to meet the requirements arising from point 72 of the Temporary Framework.","paragraph_id":"para_432"},{"text":"142","paragraph_id":"para_433"},{"text":"Furthermore, given the actual wording of point 72 and the principles governing the oversight of State aid, the Commission is not required, when making its assessment, to determine whether the proposed additional measures are the most effective possible measures to promote competition on the relevant markets, but only whether those measures are sufficient to preserve effective competition on those markets.","paragraph_id":"para_434"},{"text":"143","paragraph_id":"para_435"},{"text":"DLH is thus justified in arguing that the fact that measures other than those referred to in the decision at issue would be likely to promote greater competition on the markets at issue could not, on any view, render that decision unlawful.","paragraph_id":"para_436"},{"text":"144","paragraph_id":"para_437"},{"text":"It follows that the General Court could not properly conclude that there was a manifest error of assessment in the decision at issue by basing its finding on the fact that the Commission had not examined the potential positive effects of a slot divestiture procedure which did not exclude existing co …","paragraph_id":"para_438"},{"text":"145","paragraph_id":"para_439"},{"text":"The fifth ground of appeal must therefore be upheld.","paragraph_id":"para_440"},{"text":"The sixth ground of appeal","paragraph_id":"para_441"},{"text":"Arguments of the parties","paragraph_id":"para_442"},{"text":"146","paragraph_id":"para_443"},{"text":"By its sixth ground of appeal, DLH complains that the General Court erred in law, in particular in paragraph 501 of the judgment under appeal, by holding that the Commission had failed to fulfil its obligation to state reasons as regards its finding that the divestiture had to be carried out in return for remuneration and did not affect the attractiveness of the commitments related to those slots.","paragraph_id":"para_444"},{"text":"147","paragraph_id":"para_445"},{"text":"DLH observes that it is apparent from the case-law of the Court of Justice that a decision such as the one at issue, taken within a short period of time, must simply set out the reasons for which the Commission takes the view that the measure under examination does not appear to present serious diff …","paragraph_id":"para_446"},{"text":"148","paragraph_id":"para_447"},{"text":"DLH also submits that the decision at issue, in the light of the relevant case-law of the Court of Justice, contained reasoning that met the requisite legal standard, since, first, in view of the number of arguments put forward on every detail related to the slot commitments, which were examined by …","paragraph_id":"para_448"},{"text":"149","paragraph_id":"para_449"},{"text":"The Federal Republic of Germany and the Commission in essence support the arguments put forward by DLH in its sixth ground of appeal and argue that that ground of appeal should be upheld.","paragraph_id":"para_450"},{"text":"150","paragraph_id":"para_451"},{"text":"Ryanair and Condor dispute that line of argument and submit that the sixth ground of appeal should be rejected. They contend, in essence, that the grounds of the judgment under appeal referred to in the present ground should be upheld since the General Court, inter alia, did not exceed the limits of the judicial review which it is required to carry out.","paragraph_id":"para_452"},{"text":"Findings of the Court","paragraph_id":"para_453"},{"text":"151","paragraph_id":"para_454"},{"text":"It should be observed that, according to settled case-law, the statement of reasons required by the second paragraph of Article 296 TFEU must be appropriate to the measure at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measur …","paragraph_id":"para_455"},{"text":"152","paragraph_id":"para_456"},{"text":"Specifically, as regards a decision under Article 108(3) TFEU not to raise objections in respect of an aid measure, as in the present case, the Court has held previously that such a decision, which is taken within a short period of time, must simply set out the reasons why the Commission takes the v …","paragraph_id":"para_457"},{"text":"153","paragraph_id":"para_458"},{"text":"It is in the light of those criteria that it is necessary to examine whether the General Court erred in law in deciding that the decision at issue was vitiated by an infringement of the Commission’s obligation to state reasons under the second paragraph of Article 296 TFEU.","paragraph_id":"para_459"},{"text":"154","paragraph_id":"para_460"},{"text":"In the present case, the General Court held in paragraphs 498 to 502 of the judgment under appeal that the Commission should have set out in detail, in the decision at issue, the reasons which had led it to find that the slot divestiture at issue should be carried out in return for remuneration and …","paragraph_id":"para_461"},{"text":"155","paragraph_id":"para_462"},{"text":"In that regard, by criticising the Commission in paragraph 501 of the judgment under appeal for failing to indicate in the decision at issue why preference was not given to divestiture of the slots at issue free of charge, rather than to divestiture in return for remuneration, the General Court impo …","paragraph_id":"para_463"},{"text":"156","paragraph_id":"para_464"},{"text":"However, since the Commission is solely required under the Temporary Framework, as is apparent from paragraph 142 above, to assess whether the additional measures proposed are sufficient to preserve effective competition on the markets in question, the Commission cannot be expected, as part of its o …","paragraph_id":"para_465"},{"text":"157","paragraph_id":"para_466"},{"text":"It follows from the foregoing that the General Court erred in law in holding, in paragraph 501 of the judgment under appeal, that the Commission had failed to fulfil its obligation to state reasons since it had not explained why the divestiture of the slots at issue had to be carried out for remuneration and not free of charge.","paragraph_id":"para_467"},{"text":"158","paragraph_id":"para_468"},{"text":"It follows that the sixth ground of appeal must be upheld.","paragraph_id":"para_469"},{"text":"Conclusion","paragraph_id":"para_470"},{"text":"159","paragraph_id":"para_471"},{"text":"As the General Court correctly held in paragraph 505 of the judgment under appeal, which has not been complained of in the present appeal, each of the errors allegedly vitiating the decision, as set out in paragraph 504 of that judgment, was capable, in itself, of justifying the annulment of the dec …","paragraph_id":"para_472"},{"text":"160","paragraph_id":"para_473"},{"text":"While, in view of all the foregoing findings, the first, second and fourth to sixth grounds of appeal must be upheld, the third ground of appeal, by contrast, must be rejected. Consequently, the appeal must be dismissed in its entirety.","paragraph_id":"para_474"},{"text":"Costs","paragraph_id":"para_475"},{"text":"161","paragraph_id":"para_476"},{"text":"In accordance with Article 184(2) of the Rules of Procedure of the Court of Justice, where the appeal is unfounded, the Court is to make a decision as to the costs.","paragraph_id":"para_477"},{"text":"162","paragraph_id":"para_478"},{"text":"Under Article 138(1) of those rules, which apply to the procedure on appeal by virtue of Article 184(1) thereof, the unsuccessful party must be ordered to pay the costs if they have been applied for in the successful party’s pleadings.","paragraph_id":"para_479"},{"text":"163","paragraph_id":"para_480"},{"text":"Since Ryanair and Condor have applied for costs and DLH has been unsuccessful, DLH must be ordered to bear its own costs and to pay those incurred by Ryanair and Condor.","paragraph_id":"para_481"},{"text":"164","paragraph_id":"para_482"},{"text":"Furthermore, since the Federal Republic of Germany and the Commission have been unsuccessful, but Ryanair and Condor have not applied for costs in their respect, the Federal Republic of Germany and the Commission must be ordered to bear their own costs.","paragraph_id":"para_483"},{"text":"On those grounds, the Court (Third Chamber) hereby:","paragraph_id":"para_484"},{"text":"1.","paragraph_id":"para_485"},{"text":"Dismisses the appeal;","paragraph_id":"para_486"},{"text":"2.","paragraph_id":"para_487"},{"text":"Orders Deutsche Lufthansa AG to bear its own costs and to pay those incurred by Ryanair DAC and Condor Flugdienst GmbH;","paragraph_id":"para_488"},{"text":"3.","paragraph_id":"para_489"},{"text":"Orders the Federal Republic of Germany and the European Commission to bear their own costs.","paragraph_id":"para_490"},{"text":"Lycourgos","paragraph_id":"para_491"},{"text":"Spineanu-Matei","paragraph_id":"para_492"},{"text":"Rodin","paragraph_id":"para_493"},{"text":"Piçarra","paragraph_id":"para_494"},{"text":"Fenger","paragraph_id":"para_495"},{"text":"Delivered in open court in Luxembourg on 23 April 2026.","paragraph_id":"para_496"},{"text":"A. Calot Escobar","paragraph_id":"para_497"},{"text":"Registrar","paragraph_id":"para_498"},{"text":"C. 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