Covid aid to KLM and Condor: the CJEU sets aside the General Court judgments, dismisses Ryanair's action against Condor and sends the KLM case back to first instance
The CJEU sets aside both General Court judgments: it dismisses Ryanair's action against the Condor aid and sends the KLM case back to first instance.
The Court of Justice of the European Union delivered on 5 November 2026 two appeal judgments on the pandemic airline bailouts challenged by Ryanair. In both it sets aside the General Court judgments that had struck down the Commission's decisions, but with very different outcomes: the action against the 321 million euro German aid to charter airline Condor is dismissed in its entirety, while the case of the 3.4 billion euro Dutch aid to KLM goes back to the General Court, which must rule on the Ryanair pleas left unresolved.
The KLM case: who is the beneficiary of the aid
In 2020, the Commission approved State aid of 3.4 billion euros granted by the Netherlands to KLM, a member of the Air France-KLM group, consisting of a State guarantee for a bank loan and a State loan to provide temporary liquidity to the company against the effects of the pandemic. At Ryanair's request, the General Court annulled that first decision in 2021 because the Commission had not sufficiently explained why KLM was the sole beneficiary, to the exclusion of the other companies in the group.
The Commission then adopted, on 16 July 2021, a new decision declaring the aid compatible with the internal market, considering only KLM and its subsidiaries as beneficiaries. Ryanair appealed again and the General Court annulled once more, this time on the ground that the Commission had erred in excluding Air France and the Air France-KLM holding company from the perimeter of beneficiaries.
The Commission (case C-266/24 P), KLM (C-269/24 P) and Air France together with the holding company (C-289/24 P) appealed. The Court of Justice now sides with them on the essentials. First, it endorses the methodology: the General Court did not apply an erroneous legal framework in relying on the concept of "economic unit" to determine the beneficiary. But it committed an error of law in declaring that the Commission had been manifestly wrong: it substituted the Commission's assessment with its own without demonstrating that the institution's conclusion lacked plausibility, weighing the relevance of the elements differently and applying a different conception of the group's degree of integration. That, on appeal, is not admissible: the General Court's judicial review cannot become a fresh assessment of complex facts.
The Commission's victory is, however, partial: the Court of Justice sets aside the General Court judgment, dismisses Ryanair's action only in part and refers the case back to first instance for a ruling on the unresolved pleas - breach of the principles of non-discrimination and of the freedoms to provide services and of establishment, erroneous application of article 107(3)(b) TFEU, procedural rights and the obligation to state reasons - whose assessment requires factual findings that cannot be made on appeal. The KLM aid is therefore not definitively validated: the General Court, bound by the appeal doctrine, will have to rule on those pleas.
The Condor case: the burden sharing of the restructuring
The German aid of 321 million to Condor - approved in July 2021 without opening a formal investigation, as restructuring aid with debt write-offs of 90 million and 20.2 million in interest - was annulled by the General Court in May 2024 (case T-28/22) at Ryanair's request, on the ground that the Commission should have opened the formal investigation procedure. Condor then appealed to the Court of Justice (case C-505/24 P).
In the judgment on case C-505/24 P, the Court of Justice sets aside the General Court judgment and, as the state of the proceedings allows, decides the case itself: it dismisses in full the action Ryanair had brought at first instance against the 2021 decision. Two legal clarifications matter. First: the General Court did not err in considering that the adequate burden-sharing requirement also covers debt write-offs, a question of legal interpretation subject to full review - and the Court of Justice warns that limiting itself to a plausibility test in that terrain would weaken judicial review and legal certainty. Second: the General Court did err in declaring that the Commission had not assessed that requirement, because the decision shows that the institution implicitly considered it inapplicable, since that examination is only required when the beneficiary retains net assets after the assumption of losses by existing investors, which was not the case for Condor. The Court of Justice also examines the Ryanair pleas the General Court had not analysed - negative effects on competition, non-discrimination, freedoms to provide services and of establishment, and the obligation to state reasons - and dismisses them as unfounded.
The substantive battle over Condor is not closed either: after the 2024 annulment, the Commission opened the formal investigation and re-authorised the 321.2 million aid by decision of 28 April 2025, which Ryanair has again challenged before the General Court (case T-44/26, pending).
Six years of litigation and a clear pattern
The judgments should be placed in their complete series. The KLM bailout saw two Commission approval decisions - in 2020 and 2021 - and two General Court annulments before reaching Luxembourg; the Condor one, a 2021 decision annulled in 2024. And the file remains alive on both fronts: the Commission adopted in July 2024 a new decision on the French and Dutch aids, challenged by Ryanair and Malta Air (case T-250/25, pending), and the new authorisation of the Condor aid of April 2025 is challenged in case T-44/26. In the two cases decided this week, the Court of Justice does not enter into a fresh assessment of the facts: what it corrects is the standard of review. When the Commission makes complex technical assessments - who actually benefits from aid within a group - the first-instance judge can only annul if the institution's conclusion lacks plausibility, not because its own weighing of the elements would have been different.
The Condor case adds an economic precision of interest: the adequate burden-sharing examination ceases to be required when the beneficiary retains no net assets after the assumption of losses by existing investors. And a symmetrical clarification on reasoning: implicit reasoning may suffice when it is reconstructible in the light of the file, but only after real judicial review of the applicable legal interpretation.
A litigious strategy with an open ending
For Ryanair, the two judgments are a serious setback, but not the end of the war: it definitively loses the action against the 2021 Condor decision, keeps the KLM case open at first instance and still has pending challenges against the Commission's later decisions (T-250/25 and T-44/26). What the Court of Justice does close is the route of turning judicial review into a fresh assessment of complex facts already weighed by the Commission, a methodological reproach that transcends the specific litigation.
A doctrine with reach
The two judgments mark a turning point in the series of disputes Ryanair maintains against the European airline bailouts of the pandemic and set relevant doctrine on State aid. First, the determination of the beneficiary of aid within a group is a technical assessment by the Commission that can only be annulled if it lacks plausibility, not because the judge would have weighed differently. Second, the requirement of adequate burden sharing has its own condition of application and does not operate when the beneficiary is left without net assets after the assumption of losses.
For competition and regulatory firms, the judgments are also a reminder of the limits of the General Court's review of complex economic assessments and of the value of well-reconstructed implicit reasoning on appeal.
You can follow our coverage of other recent European decisions, such as the judgment on the European arrest warrant and the proportionality of sentences, that on detergent packaging mistakable for food or Spain's victory in London on the assignment of ICSID awards to funds.
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Fuentes
The specific data in this article come from the official sources cited.
