EU court backs Lufthansa and easyJet acquisition of Air Berlin

Lufthansa and easyJet have gained backing from the EU General Court for their acquisitions of insolvent German carrier Air Berlin’s assets four years ago.

In 2016, Air Berlin implemented a restructuring plan that included entering an agreement with Lufthansa in order to sublet aircraft and crew. However, the loss of financial support loans granted to Air Berlin by one of its main shareholders forced it to file for insolvency in 2017. As such, a guaranteed loan by the German authorities was intended to enable Air Berlin to continue operating for three months to allow it to dispose of its assets. This was done by a Lufthansa takeover and an agreement with easyJet aimed at transferring slots held by Air Berlin. Those mergers were approved by the Commission and were considered not to create “a significant impediment to effective competition.”

In considering this analysis to be incorrect, Polskie Linie Lotnicze “LOT”, presented as a competitor, brought two actions before the General Court, each seeking the annulment of one of the contested decisions.

The court dismissed this claim last Wednesday on five grounds:

First, it is futile for the applicant to seek to challenge the factual accuracy of Commission’s the presentation.

Second, in pleas alleging a manifest error in the assessment of the effects of mergers, the Commission has a certain discretion, especially regarding complex assessments of economic nature.

Third, complaints alleging the commitment given by Lufthansa were insufficient and no such commitments were given from the part of easyJet.

Fourth, the applicant had not shown the financial support that Air Berlin had received under the rescue aid in connection with the mergers in question.

Finally, the applicant’s plea alleging failure to state reasons was unfounded and thus should be dismissed immediately.