EU Opens Probe Into Lufthansa's COVID State Aid

DALLAS — The European Commission opened a probe on Monday to ascertain if state assistance provided by the German government to Lufthansa (LH) during the COVID-19 outbreak violated EU regulations.

According to the dailysabah.com, the EU General Court's decision to revoke the state aid granted to the German airline in May 2023 prompted the probe.

In June 2020, the German government gave Lufthansa billions of euros in public aid during a period when generally stringent subsidy regulations were relaxed to aid nations affected by the COVID-19 epidemic.

The EU's top competition authority is currently evaluating the strength of market competition at German and Austrian airports as well as LH's eligibility for German state subsidies.

The EU and Lufthansa

The Commission has had its eye on LH for a while. On January 23, 2024, the bloc entity launched a thorough inquiry to determine if LH's purchase of an ITA Airways (AZ) interest would limit competition in the supply of passenger air transport services into and out of Italy.

However, the LH-AZ merger was ultimately made possible by the EU's conditional permission granted on Wednesday, July 3, 2924. LH will take two years to sift through AZ's financial before deciding for a complete takeover.