Aegean wades in in favor of the EU Commission

With Olympic Airways, and its successor Olympic Airlines, under immense pressure from the European Commission to return hundreds of millions of euros in illegal subsidies to the state, the former is trying to counterattack using an old decree from 1956 granting the company, about to be handed then to tycoon Aristotle Onassis, special privileges. A rival for Olympic’s share in the aviation market, Aegean Airlines, has waded into the controversy, supporting the Commission’s case. On June 9, Aegean Airlines submitted a petition to the European Court of First Instance asking to be acknowledged as a legal party to the case against Olympic Airlines. The latter has appealed to the court against the European Commission’s decision, in December 2005, that the company had received 39.75 euros in illegal state subsidies that it must return. The Commission has contested Greece’s decision to split Olympic Airways into two companies, with Olympic Airlines undertaking the flight schedule and Olympic Airways the ground handling and technical operations. Specifically, it has never accepted the argument that Olympic Airlines is a new company. Aegean Airlines has instructed a team of three experienced lawyers to ask the European court to dismiss Olympic Airlines’ arguments. In their submission, Aegean’s lawyers describe their company as Olympic Airlines’ main competitor, both in the domestic aviation market and to that of international flights originating in Greece. They say that Aegean «repeatedly submitted to the relevant European Commission agencies remarks and complaints about the illegal state subsidies given periodically to Olympic Airlines». Aegean criticizes the repeated violations of EU law through state subsidies, as well as a law protecting the Olympic Airways group from bankruptcy. Its lawyers say that «enforcing the EU decision (for the return subsidies totaling almost 600 million euros to he state) is of crucial importance to us because it will contribute significantly to stabilizing the market». Aegean further remarks that the Greek State has shown «special tolerance» for Olympic Airlines’ failure to pay its employees’ pension funds, attacks the legislation allowing the airline to pay its debt back and points out that the subleasing of aircraft to Olympic Airlines has been made at very low prices. On its part, Olympic Airways, is relying on an old piece of legislation (Royal Decree 3569/56) to ask the State to pay it 1 billion euros for the costs of transferring the company’s operations to the new airport in 2001 and for foregone revenue during the transfer. In this way, but it hopes to cancel out some of the amount the Commission has said it must return to the State.

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