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Olympic Airlines SA

Olympic Airlines can keep state money says EU

Stephanie Bodoni  Sep 13, 2010

Olympic Airlines SA won’t have to repay about 131.5 million euros ($168.4 million) to Greece after it partly won a court bid to overturn a European Commission decision forcing it to give back unlawful state aid.

The European Commission made some mistakes in its analysis when it ordered Greece to recoup about 600 million euros from the carrier, the EU’s General Court, the region’s second-highest tribunal, said in a ruling today.

Today’s cases stem from a 2005 order by the commission, the EU’s antitrust agency, telling Greece to recover the financial support, which the regulator said broke rules preventing anti- competitive subsidies. The EU’s top court in a 2008 ruling chided Greece for not recouping the aid.

The disputes are part of a series of lawsuits at the EU courts over commission decisions in 2002 and 2005 that found subsidizing the airline violated the region’s law.

Amelia Torres, a spokeswoman for the commission, declined to comment.

Olympic Airlines, currently owned by Marfin Investment Group SA, was created in 2003, after the bankruptcy of Olympic Airways, which now handles airport ground services. Greece’s government won EU approval in 2008 to sell unprofitable Olympic and its ground-handling and maintenance-services businesses separately in an effort to end years of disputes over government subsidies.

Merger Agreement

Aegean Airlines SA said in February it reached an agreement to team up with Olympic to create one company that would be more competitive against bigger European rivals, protect jobs and boost profit. On July 30, the commission opened an in-depth review into the combination, amid fears it may harm competition.

Greece has argued that it has fully recovered the aid in today’s cases, totaling about 600 million euros, said Paris Anestis, a partner in the Brussels office of law firm Howrey LLP in Brussels, who represented Olympic Airways.

The cases are T-415/05 Greece v Commission, T-416/05 Olympiakes Aerogrammes v Commission, T-423/05 Olympiaki Aeroporia Ypiresies v Commission.

Olympic Airlines can keep state money says EU
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