Brussels - The European Commission gave the green light to a 550-million-euro (596-million-dollar) loan guaranteed by the German state for troubled airline Condor.
The company saved from bankruptcy
The aid package is designed to compensate for some of the damage Condor has sustained during the coronavirus pandemic, the EU's top competition official, Margrethe Vestager, said.
"We cooperate with member states to find workable solutions to support companies in these difficult times," she added.
Economy Minister Peter Altmaier said the loan was based on the airline's good performance. "In normal times, the firm was operationally healthy and had good prospects," he said.
VC expresses satisfaction
Pilots' union Vereinigung Cockpit (VC) said it was pleased with the outcome.
"With the example of Condor, we see that collective negotiation by state, firm and employees can lead to sustainable solutions," VC president Markus Wahl said. "We need such a way also for the other German aviation firms."
Lufthansa yet to be saved
A financial package has not yet been agreed for Lufthansa, a much larger airline whose financial requirement is estimated by Berlin at 10 billion euros.
It is in Germany's interest, and that of German airports, for both Condor and Lufthansa to be saved, the president of the German Airport Association (ADV), Stefan Schulte, said. A strong, competitive Lufthansa must connect Germany to the world in future, he said.
Lufthansa announced a first billion-euro loss in recent weeks and, with air travel at a standstill, said that it is unable to save itself without outside help.
Following the collapse of parent company Thomas Cook last year, Condor was due to be taken over by the Polish airline LOT. But the deal fell apart during the global Covid-19 health crisis, with LOT stepping back because of problems of its own.
Aviation sector facing hard times
The aviation sector has been hit hard by the outbreak, which led to grounded flights and slashed demand.
The German government and the state of Hesse, where Condor is headquartered, then granted the charter airline - which specializes in holiday flights - a loan of 550 million euros.
The EU's executive branch acts as the watchdog for the bloc's strict state aid rules, which are designed to stop national governments giving companies undue competitive advantage.
These rules have been relaxed in light of the economic turmoil unleashed by the coronavirus pandemic