C-505/24

OPINION OF ADVOCATE GENERAL

BIONDI

delivered on 26 March 2026 ( 1 )

Case C ‑ 505/24 P

Condor Flugdienst GmbH

v

3. As concerns restructuring aid, Section 3.5.2 of the R&R Guidelines lays down specific requirements in order to ensure that the amount and intensity of the aid is limited to the strict minimum necessary to enable restructuring to be undertaken. To that end, a significant level of ‘own contribution’ to restructuring costs ( 5 ) and adequate ‘burden sharing’ must be ensured.

4. Burden sharing is a relatively new requirement in State aid law. It first appeared in the 2009 State aid guidelines for the banking sector, ( 6 ) before moving to the forefront in the 2013 Banking Communication. ( 7 ) It was then included in the revised 2014 R&R Guidelines, which were adopted as part of a broader State aid modernisation (SAM) programme. Regulated in Section 3.5.2.2 of those latter guidelines, it requires, in the first place, that shareholders and, where appropriate, subordinated creditors absorb existing losses in full before public funds are injected. ( 8 ) Burden sharing ensures that aid is not used to shield investors from the consequences of past business decisions, as that could create moral hazard and undermine market discipline. ( 9 ) Indeed, the risk of moral hazard, arising when undertakings may anticipate that they are likely to be rescued when they run into difficulty and embark upon excessively risky and unsustainable business strategies, is a central concern underpinning the framework of the R&R Guidelines. ( 10 )

5. Adequate burden sharing under the R&R Guidelines does not only require that past losses be absorbed in full before any State intervention. As specified in point 67 of those guidelines, it also requires that State aid that enhances the beneficiary’s equity position ‘should be granted on terms that afford the State a reasonable share of future gains in value of the beneficiary, in view of the amount of State equity injected in comparison with the remaining equity of the company after losses have been accounted for’. The dispute at the heart of the present appeal concerns the application of that specific requirement.

10. In the second place, the Commission approved the COVID-19 aid of 2021, which took the form of a partial write-off, amounting to EUR 60 million, of debt resulting from the COVID-19 loans of 2020, as compatible with the internal market on the basis of Article 107(2)(b) TFEU. ( 15 )

11. Lastly, the Commission, on the basis of Article 107(3)(c) TFEU and the R&R Guidelines, approved an aid measure to support the restructuring and continuation of Condor’s operations, which comprised two parts (‘the measure concerned’). The first part consisted of a modification to the terms of the COVID-19 loans of 2020 and a partial write-off of EUR 90 million of debt resulting from those loans. The second part involved the write-off of EUR 20.2 million of debt corresponding to the interest payable by Condor following the amended decision on the COVID-19 aid of 2020 ( 16 ) (‘the decision at issue’). Both were part of a financial package negotiated by the Federal Republic of Germany, Condor’s new private shareholder, Attestor Limited (‘Attestor’), and the German public development bank, the Kreditanstalt für Wiederaufbau (‘KfW’), with a view to supporting the restructuring and the continuation of Condor’s operations (‘the purchase agreement’).

15. By its appeal, Condor claims that the Court of Justice should set aside the judgment under appeal, dismiss Ryanair’s action in its entirety and order Ryanair to bear the costs relating to the proceedings at first instance and to the appeal proceedings.

16. The Commission and the Federal Republic of Germany both contend that the Court should uphold the appeal, set aside the judgment under appeal and order Ryanair to pay the costs.

17. Ryanair contends that the Court should dismiss the appeal and order Condor to pay the entirety of the costs incurred by Ryanair in the present proceedings.

III. The appeal

18. In support of its appeal, Condor puts forward three grounds of appeal. By its first ground of appeal, it challenges the General Court’s interpretation of the scope of point 67 of the R&R Guidelines. By its second ground of appeal, it claims that the decision at issue in any case complies with point 67 and that the General Court essentially failed to assess the content of that decision. By its third ground of appeal, Condor argues that the alleged flaw in the Commission’s examination had no impact on the outcome of the decision at issue.

19. As requested by the Court, the present Opinion will focus exclusively on the second ground of appeal.

22. Condor argues that the General Court erred in considering that the Commission should have had doubts as to whether the measure concerned satisfied the requirement set out in point 67 of the R&R Guidelines. According to Condor, the decision at issue contains sufficient elements to consider that that requirement has been complied with, even though it does not contain an explicit reference to point 67.

23. I would observe, at the outset, that, according to settled case-law, in reviewing the legality of acts under Article 263 TFEU, the EU Courts cannot, under any circumstances, substitute their own reasoning for that of the author of the contested act. ( 20 ) Having concluded that the Commission had failed to examine whether the measure in question complied with point 67 of the R&R Guidelines, it was not for the General Court to carry out such an assessment, by determining whether, on the basis of the information contained in the decision at issue, the measure concerned had been granted on terms that would afford the Federal Republic of Germany a reasonable share of future gains in value of Condor.

24. It is true, as Condor argues, that the Court of Justice stated in the judgment of 28 September 2023, Ryanair v Commission , ( 21 ) that the General Court is competent to recall the content of the decision contested before it and to draw conclusions from the information contained therein. However, that does not empower the General Court, nor does it require it, to carry out, of its own initiative, an assessment that the Commission has failed to undertake, in particular when such an assessment implies the exercise of discretion. According to the case-law, the finding of an insufficient or incomplete examination constitutes an indication of the existence of serious difficulties in the assessment of the measure at issue which, in itself, calls into question the lawfulness of a decision not to raise objections, such as the decision at issue. ( 22 )

27. By the first submission of the second ground of appeal, Condor claims that, in rejecting the argument that the future repayment of the remaining portion of the debt left from the COVID‑19 loans of 2020 could be considered to afford the State ‘a reasonable share of future gains in value’ of Condor within the meaning of point 67 of the R&R Guidelines, the General Court manifestly distorted both Condor’s submissions and those of the Commission. The General Court was wrong to consider that Condor had ‘supplemented during the proceedings’ the statement of reasons for the decision at issue. ( 23 ) Both the Commission and Condor had in reality argued in their respective submissions that recital 126 of that decision clearly showed that Attestor’s bid offered the best conditions for the repayment of the public loans and that the financial package offered by Attestor also reflected the potential future profits that Condor could generate. ( 24 )

28. In the aforementioned recital 126 of that decision, after briefly outlining the different components of the measure concerned, the Commission stated that the conditions of the purchase agreement and the restructuring of the COVID-19 loans of 2020 were a package geared to maximising the benefits for Attestor as well as optimising the reimbursement of the loan, and depended on each other. While the overall interest amount due on the restructured loan was lower than that of the original loan, ‘it [was] part of a negotiated package aiming to maximise the return for Attestor as well as for the German [G]overnment and can thus be considered to constitute an appropriate remuneration of the aid’.

31. By the second submission of the second ground of appeal, Condor argues that the General Court erred in law by finding that securing the best conditions for the repayment of the public loans through the package offered by Attestor could not be considered to afford the State a reasonable share in future gains within the meaning of point 67 of the R&R Guidelines. That package included a partial write-off, as well as an earn-out mechanism for parts of the loans restructured, whereby, if the company performed well, a larger portion of the loan amount would be repaid. The General Court’s argument that ‘by its very essence, a partial write-off of debt implies that the part of the debt not written off will be repaid’ ( 25 ) failed to respond to the arguments raised by Condor and the Commission based on recital 126 of the decision at issue.

32. As I have already noted in point 29 of the present Opinion, recital 126 of the decision at issue does not address at all the question of the compliance of the write-off of debt with point 67 of the R&R Guidelines. Merely finding that the financial package agreed with Attestor constituted appropriate remuneration of the aid could not lead the General Court to consider that the Commission had duly assessed that requirement and correctly concluded, without any need for further enquiry, that it afforded the Federal Republic of Germany a reasonable share of future gains in value of Condor in return for the partial write-off of debt included in the measure concerned.

33. As regards the earn-out mechanism provided for in the aforementioned package, it is not disputed that that mechanism constitutes a condition attached to the repayment of the remaining part of the loan restructuring and thus it is not relevant for the purpose of determining whether the partial write-off of debt agreed by the Federal Republic of Germany complied with point 67 of the R&R Guidelines. To conclude otherwise would amount, as observed by the General Court in paragraph 232 of the judgment under appeal, to excluding de facto the partial write-off of debt from the scope of point 67 of those guidelines.

37. The Commission also claims that the General Court misinterpreted point 67 of the R&R Guidelines. It argues that points 66 and 67 thereof seek to reduce the risk of moral hazard in relation to existing investors by preventing restructuring aid from protecting them from the consequences of their choice to invest in the beneficiary. The ‘existing investors’ are the incumbent shareholders and, to a certain extent, subordinated creditors. Attestor, whose entry into Condor was made possible by the approval of the measure concerned, should not be understood as a shareholder for the purposes of point 67 of the R&R Guidelines. The burden sharing required under point 67 is in proportion to ‘the remaining equity of the company after losses have been accounted for’. Therefore, where, as in the present case, there is a total loss of the rights of the incumbent shareholder and an almost total loss of the claims of creditors, any share of the State in the future upsides of the restructuring is reasonable, including a share of 0%. The Federal Republic of Germany makes a similar argument in its response.

38. Those claims have been endorsed by Condor in its reply and at the hearing.

41. It must be recalled that, in accordance with Articles 172 and 174 of the Rules of Procedure of the Court of Justice, parties to the relevant case before the General Court having an interest in the appeal being allowed or dismissed may submit a response which seeks to have that appeal allowed or dismissed, in whole or in part. Those parties may also, by virtue of Article 176 and Article 178(1) and (3), second sentence, of the Rules of Procedure, submit a cross-appeal, which must be introduced by a document, separate from the response, which seeks to have annulled, in whole or in part, the decision of the General Court on the basis of pleas in law and arguments separate from those relied on in the response. According to the Court’s case-law, it is apparent from those provisions that the response referred to in Article 172 of those rules may not seek to have the judgment of the General Court set aside on the basis of distinct and independent grounds from those raised in the appeal, since such grounds may be raised only as part of a cross-appeal. ( 31 )

43. The Commission’s plea is also based on an interpretation of point 67 of the R&R Guidelines that differs and contradicts the one supported by Condor. While Condor, in its first ground of appeal, has explicitly rejected the premiss that a risk of moral hazard is the rationale underlying point 67 of the R&R Guidelines and claims that the General Court unlawfully transferred that rationale, which actually underlies points 65 and 66, to point 67, the Commission maintains that reducing such risk is indeed the main objective of that latter point. Moreover, the Commission argues that point 67 of the R&R Guidelines does not concern new investors, whereas, in its appeal, Condor has claimed that the financial package offered by Attestor constituted appropriate remuneration for the aid and afforded the State a reasonable share of future profits that Condor might generate, implicitly recognising that the aforementioned point 67 may impact new investors.

44. Finally, and most importantly, in challenging the General Court’s conclusion that the decision at issue did not contain an assessment of compliance with point 67 of the R&R Guidelines, Condor, in its appeal, and the Commission, in its response, allege different errors in law. While the Commission raises a misinterpretation of the aforementioned point 67 and of recital 135 of the decision at issue, Condor alleges that its submission on the relevance of recital 126 was distorted, and that the General Court’s reasoning in rejecting that submission based on recital 126 of the decision was flawed and inadequate or otherwise insufficient.

48. However, that plea is, in my view, unfounded.

49. In support thereof, the Commission refers to paragraphs 122 and 123 of its defence and to paragraphs 94 and 95 of its rejoinder at first instance.

50. In those two paragraphs of its defence, addressing Ryanair’s sixth plea, the Commission put forward an argument that the burden-sharing requirement had been complied with. Specifically, first, it observes that the shares in Condor had been placed in a trust, with Condor’s previous owner losing all the value of its shareholding and not benefiting in any way from any upside of a successful restructuring of the beneficiary. Second, it states that the beneficiary’s creditors also wrote off almost all of their claims in the insolvency procedure. Recital 135 of the decision at issue, which is referred to only once in the Commission’s defence, is mentioned in footnote 164 thereto in support of that argument. Neither the reference to recital 135 of the decision at issue nor the argument made by the Commission in paragraphs 122 and 123 of its defence specifically addresses point 67 of the R&R Guidelines.

51. In paragraphs 94 and 95 of its rejoinder, the Commission argued that Ryanair had failed to adduce evidence to support its claim that the selling price of Condor would not have reflected the potential future profits the beneficiary could generate and recalled that ‘the purpose of burden sharing is to ensure that the incumbent owners (and subordinated creditors) do not unduly benefit from equity support by the State but that they bear the losses in full where possible’. ( 34 )

55. In those circumstances, the General Court cannot be criticised for failing to provide specific reasons to address points which were neither clearly articulated nor substantively developed before it. Nor can it be criticised for having focused on the argument alleging that point 67 of the R&R Guidelines is not applicable to the write-off of debt, developed by the Commission during the proceedings at first instance. ( 36 )

56. It follows from all of the foregoing that the pleas put forward by the Commission and by the Federal Republic of Germany in support of the second ground of appeal should, in my view, be rejected as partly inadmissible and partly unfounded.

57. The following considerations on the merits of the pleas which, in my view, should be declared inadmissible, are therefore put forward in the event that the Court does not agree with my proposal.

58. At the outset, I wish to address the two claims raised by the Federal Republic of Germany and the Commission, as referred to in point 39 of the present Opinion.

59. The Federal Republic of Germany criticises the statement made by the General Court in paragraph 35 of the judgment under appeal, according to which judicial review of the existence of ‘doubts’ ( 37 ) as to whether the measure concerned, in so far as it falls within the scope of Article 107(1) TFEU, is compatible with the internal market, will, by nature, go beyond consideration of whether or not there has been a manifest error of assessment. The Federal Republic of Germany claims that such an approach results in a more extensive review of a Commission decision not to initiate a formal investigation procedure pursuant to Article 4 of Regulation 2015/1589 than that of a Commission decision adopted at the end of such a procedure.

61. However, it should be borne in mind that the question whether serious difficulties exist at the preliminary examination stage, justifying the decision to initiate the formal investigation procedure, is distinct from the substantive compatibility assessment of the measure. As correctly pointed out by the General Court in paragraph 35 of the judgment under appeal, the concept of ‘doubts’ set out in Article 4(3) and (4) of Regulation 2015/1589, which takes the form of the existence of serious difficulties encountered by the Commission in its examination of whether the measure at issue constitutes aid or whether it is compatible with the internal market, is objective in nature. ( 40 ) The EU Courts must be able to determine objectively, comparing the grounds of the decision not to raise objections with the information available to the Commission at the time of its adoption, whether that institution was in a position to resolve all the relevant issues without initiating the formal investigation procedure. While the substantive economic or social appraisals in support of the conclusion that initiating the formal investigation procedure is not required are subject to limited judicial review, the question of whether that conclusion meets the legal standard of the ‘absence of serious difficulties’ is not. The claim put forward by the Federal Republic of Germany must therefore, in my view, be rejected.

62. As concerns the Federal Republic of Germany’s claim that the General Court erroneously confused the absence of an adequate statement of reasons in the decision at issue with the existence of serious difficulties, as I have already mentioned, according to the case-law, the finding of an insufficient or incomplete examination calls into question the lawfulness of a decision not to raise objections, in that this constitutes an indication of the existence of serious difficulties in the assessment of the measure concerned. ( 41 ) Therefore, that claim should also be rejected.

66. The Court has consistently held that, for the purpose of interpreting a provision of EU law, it is necessary to consider not only the wording of such a provision, but also its context and the objectives of the rules of which it is part. ( 43 ) That case-law has been relied upon – in my view rightly so – to interpret both Commission decisions ( 44 ) and guidelines, namely in the field of State aid, including by the Court of Justice itself. ( 45 ) In the same vein, other well-established principles on the interpretation of provisions of EU law should be deemed to be equally applicable when it comes to Commission guidelines. That includes the principle that where such a provision is open to several interpretations, preference must be given to the one that ensures that the provision retains its effectiveness. ( 46 )

69. Point 67 of the R&R Guidelines applies to ‘any State aid that enhances the beneficiary’s equity position’ and requires that, in such situations, the State ‘should’ be afforded ‘a reasonable share of future gains in value of the beneficiary’, to be determined ‘in view of the amount of State equity injected in comparison with the remaining equity of the company after losses have been accounted for ’ (emphasis added). Arguably, point 67 of the R&R Guidelines is intended to apply once the burden-sharing requirements laid down in point 66 of those guidelines have been applied and there is positive equity remaining against which such a comparison can be made. Point 67 would thus constitute an extra step, conditional to the existence of remaining equity after point 66 has been abided by. The reference to ‘remaining equity’ is, however, far from being unambiguous, especially when one considers that the requirement of a ‘reasonable share of future gains’ concerns a different point in time than losses absorption and is applied only once the beneficiary’s viability has been restored. In and of itself, that reference does not make it possible to conclude that point 67 of the R&R Guidelines concerns solely existing shareholders and subordinated creditors and not investors intervening in the restructuring plan alongside the State.

71. As concerns the objectives pursued by the requirement in point 67 of the R&R Guidelines, it is clear from point 65 thereof that burden sharing under Section 3.5.2.2 aims to reduce moral hazard by ensuring that existing investors do not escape the consequences of their past risk-taking at the expense of public funds. However, it seems clear to me – and is, moreover, expressly stated in point 11 of the R&R Guidelines ( 48 ) that point 67 is not exclusively (or even mainly) limited to addressing concerns related to moral hazard. First, its position within the section of the guidelines devoted to proportionality, alongside own contribution, indicates that burden sharing pursues a complementary and overarching objective, namely ensuring that State aid is limited to the minimum necessary, reducing the burden on taxpayers. ( 49 ) Second, the logic underlying point 67 differs slightly from that of point 66. Rather than imposing obligations on specific categories of private shareholders or creditors of the beneficiary, point 67 regulates the terms on which State aid that enhances equity must be granted. In that sense, it appears to be more about setting an own contribution requirement than a burden-sharing requirement and to be primarily designed as an incentive to limit the amount of restructuring aid requested.( 50 ) Thus, it cannot, in my view, be entirely ruled out that point 67 of the R&R Guidelines, like point 62 on own contribution and unlike point 66, is also intended to apply to new investors participating in restructuring and benefiting from the future gains in value of the beneficiary, which are, at least in part, generated owing to State aid. As the Federal Republic of Germany points out, the entry of Attestor into Condor would not have been possible without the aid granted under the measure concerned. Therefore, it is reasonable to expect Condor’s future profits to be shared fairly with taxpayers.

1 Original language: English.

2 OJ 2014 C 249, p. 1; ‘the R&R Guidelines’.

3 Points 26 and 27 of the R&R Guidelines.

4 See point 52 of the R&R Guidelines.

5 See points 62 to 64 of the R&R Guidelines. Such a contribution is required from the own resources of the aid beneficiary, its shareholders or creditors or the business group to which it belongs, or from new investors, and it must be real, actual, free of aid and adequate, that is to say it must be up to at least 50% of the restructuring costs in normal circumstances.

6 Commission communication on the return to viability and the assessment of restructuring measures in the financial sector in the current crisis under the State aid rules (OJ 2009 C 195, p. 9).

13 T‑665/20, EU:T:2021:344.

14 Decision C(2021) 5731 final of 26 July 2021 on State aid SA.63617 (2021/N) – Germany – COVID-19 – Condor damage compensation II.

15 Decision C(2021) 5731 final of 26 July 2021 on State aid SA.63617 (2021/N) – Germany COVID-19 – Condor damage compensation II.

16 Decision C(2021) 5729 final of 26 July 2021 on State aid SA.63203 (2021/N) – Germany – Restructuring aid for Condor.

17 Condor and the Federal Republic of Germany intervened before the General Court in support of the form of order sought by the Commission.

18 After the judgment under appeal, the Commission informed the Federal Republic of Germany of its decision to initiate a formal investigation procedure on 29 July 2024, with a view to adopting a new decision on the restructuring aid to Condor; see Decision C(2024) 5322 final of 29 July 2024 on State Aid SA.63203 (2024/C) (ex 2021/N) – Germany – Restructuring aid for Condor (OJ C, C/2024/5533). A decision of re-approval has since been adopted, in April 2025; see Decision C(2025) 2294 final of 28 April 2025 on the State aid SA.63203 (2024/C) (ex 2021/N) implemented by Germany for [Condor] (OJ L, 2025/2178) (‘the new decision’). The new decision has not been challenged before the General Court.

24 In the defence, the Commission argued, in relation to recital 126, that the burden-sharing requirement was respected because Attestor acquired Condor through a bidding process where its bid was accepted out of the three available bids as it offered the best conditions for the repayment of the public loans. In support of the Commission’s submissions before the Court, Condor argued, in its statement in intervention, that without Attestor’s offer, which reflected potential future profits in its pricing, there would have been much slimmer – if any – chances of a repayment of the Federal Republic of Germany’s previous loans. In that situation, taking all the losses and potential losses into account, the repayment of previous loans could be considered a reasonable share in future gains of Condor for the Federal Republic of Germany. According to Condor, those considerations were reflected in recital 126 of the decision at issue. While that argument was central to Condor’s statement in intervention, recital 126 of the decision at issue was referred to only once in the Commission’s defence, in footnote 165 thereto.

25 See paragraph 232 of the judgment under appeal.

26 The decision at issue, recital 19 et seq. and recital 135.

27 The decision at issue, recital 33 and recital 132 et seq.

32 See, to that effect, judgment of 14 September 2023, Land Rheinland-Pfalz v Deutsche Lufthansa (C‑466/21 P, EU:C:2023:666, paragraph 93 and the case-law cited).

33 See judgment of 9 March 2023, Les Mousquetaires and ITM Entreprises v Commission (C‑682/20 P, EU:C:2023:170, paragraph 39 and the case-law cited).

34 The Commission explicitly referred only to points 65 and 66 of the R&R Guidelines. It added, referring back to paragraphs 122 and 123 of its defence, that Ryanair had not ‘claimed (let alone shown) that the incumbent owners or subordinated creditors of Condor would have reaped undue benefits’.

35 See judgment of 14 September 2023, Land Rheinland-Pfalz v Deutsche Lufthansa (C‑466/21 P, EU:C:2023:666, paragraph 94 and the case-law cited).

36 This argument, which does not appear in the Commission’s written submissions at first instance, was presented, according to the Federal Republic of Germany’s response, at the hearing before the General Court held on 22 September 2023.

37 The concept of ‘doubts’ appears in Article 4(3) and (4) of Regulation 2015/1589 and indicates the existence of serious difficulties encountered by the Commission in its examination of the measure concerned.

42 It is well known that, in the exercise of its discretion under Article 107(3) TFEU, the Commission may adopt soft law instruments in order to clarify, while necessarily complying with higher-ranking legal provisions (whether that be primary and/or secondary EU law), the criteria which it proposes to apply in assessing the compatibility of national measures with the internal market under State aid rules. Guidelines constitute a self-imposed limitation to the discretion enjoyed by the Commission. The latter cannot, as a general rule, depart from those guidelines, at the risk of being found to be in breach of general principles of law, such as equal treatment or the protection of legitimate expectations (see judgment of 19 July 2016, Kotnik and Others , C‑526/14, EU:C:2016:570, paragraphs 39, 40 and 43). If guidelines are not capable of imposing independent obligations on the Member States, their provisions may become binding by virtue of a Commission decision applying them (see, to that effect, judgment of 12 October 2023, Est Wind Power , C‑11/22, EU:C:2023:765, paragraphs 30 to 38, and Opinion of Advocate General Rantos in Est Wind Power , C‑11/22, EU:C:2023:241, points 28 to 32).

43 See, ex multis , judgments of 17 November 1983, Merck (292/82, EU:C:1983:335, paragraph 12); of 7 March 2018, SNCF Mobilités v Commission (C‑127/16 P, EU:C:2018:165, paragraph 29); and of 12 October 2023, Est Wind Power (C‑11/22, EU:C:2023:765, paragraph 46).

44 See, to that effect, judgments of 7 March 2018, SNCF Mobilités v Commission (C‑127/16 P, EU:C:2018:165, paragraph 29 et seq.), and of 17 December 2015, SNCF v Commission (T‑242/12, EU:T:2015:1003, paragraph 88 et seq.).