In the long-running legal dispute over state subsidies from the state of Rhineland-Palatinate to Hahn Airport, the Court of Justice of the European Union (EU) has now ruled in favor of the state for the first time.
In a new ruling following an appeal before the European Court of Justice (ECJ), Deutsche Lufthansa AG's lawsuit against state support was dismissed on formal grounds (case number: T-218/18 RENV). The reason given was that the airline had not sufficiently demonstrated its standing to sue and had unclearly formulated its application objectives. This legal victory for Rhineland-Palatinate represents a significant turning point in the long-running conflict over the financing of Hunsrück Airport.
EU Commission approved millions in aid to cover losses
The core of the dispute revolves around a 2017 European Commission decision allowing Rhineland-Palatinate to offset operating losses at Hahn Airport for the period from 2017 to 2021 with aid totaling €25,3 million. Lufthansa, which is not a user of Hahn Airport itself, considered this financial support an unlawful distortion of competition and therefore brought the case before the General Court of the European Union. In its view, the subsidies would negatively impact competition in the aviation market and thus cause it an economic disadvantage.
A central factor in the EU Commission's argument was the fact that Hahn Airport is heavily used by the Irish low-cost airline Ryanair, Europe's largest low-cost carrier. The Commission considered that Ryanair's flight connections to and from Hahn did not significantly impair Lufthansa's competitive position. This assessment was based on the assumption that the two airlines' business models and their primary target groups were sufficiently different.
First ruling overturned – ECJ referred case back
In an initial case before the General Court of the EU in May 2021, Lufthansa's lawsuit was initially successful. The court overturned the multi-million euro support provided by the state of Rhineland-Palatinate, thereby upholding Lufthansa's arguments on key points. The state of Rhineland-Palatinate, supported by the German federal government, appealed this ruling to the European Court of Justice. The ECJ overturned the first-instance judgment and referred the case back to the General Court of the EU for clarification of further legal issues.
The Court of Justice's renewed ruling represents a surprising turn of events. Unlike in the first case, Lufthansa's lawsuit was dismissed this time not on merits, but on purely formal grounds. The court criticized Lufthansa for not having sufficiently explained in its statement of claim how its own competitive position would be affected by the subsidies to Hahn Airport. Furthermore, the specific objectives Lufthansa was pursuing with its lawsuit remained unclear. These formal omissions ultimately led to the dismissal of the lawsuit.
Further appeals against the judgment possible
Although the current ruling represents a victory for Rhineland-Palatinate, the subsidy dispute surrounding Hahn Airport may not yet be finally settled. The General Court's decision can be appealed again. It remains to be seen whether Lufthansa will exercise this option and, if necessary, bring the case back before the European Court of Justice.
The future of state support for Hahn Airport and the associated competition law issues therefore remain the subject of legal disputes. The outcome of this lengthy procedure is of significant importance not only for Hahn Airport and the state of Rhineland-Palatinate, but also for the European aviation industry and the interpretation of competition law with regard to state aid.
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