Lawsuit hits OA sell-off hopes

Ryanair’s lawsuit against the European Commission over its failure to make Olympic Airlines pay back state aid will discourage any investors interested in the airline, Greece said yesterday. Greece has been trying to privatize the airline, renamed from Olympic Airways, but repeated calls for interest from investors have yielded no results for the debt-ridden carrier. Ryanair has lodged complaints against the European Commission regarding state subsidies to four other carriers: Air France-KLM Group, Lufthansa, Greece’s Olympic Airlines and Alitalia subsidiary Volare. The carrier filed lawsuits at the European Court of First Instance, the European Union’s second-highest court. The Commission has also ordered Greece to retrieve hundreds of millions in state aid dating back to the 1990s, something which it has yet to do. «Ryanair’s lawsuit… and the demand to open up dossiers on ‘new illegal state subsidies’ are worsening the situation of Olympic,» Transport Minister Costis Hatzidakis said in a statement following a meeting with European Transport Commissioner Jacques Barrot in Brussels. «Anyway, as long as legal problems with Brussels remain unsolved, any credible investor is discouraged,» he said in the statement released in Athens. The Commission first ruled in 1996 that Greece was in breach of EU state aid rules. Olympic Airways was split into two units in 2003: a debt-heavy services company and a debt-free carrier, Olympic Airlines. Brussels still regards it as one company. Olympic Airlines was thrown a lifeline last December when Greece’s Supreme Court ordered the state to pay the carrier 563 million euros for unpaid services it had rendered in the past. «Despite these problems the battle (to rescue Olympic) will continue,» Hatzidakis said. «Taxpayers should know we respect their money and are seeking a… viable solution.» Separately, Ryanair, Europe’s biggest discount airline, sued the European Commission for a fifth time yesterday, saying the regulatory agency failed to investigate government aid to Alitalia, Italy’s state-controlled carrier. Alitalia Alitalia received a -1.7 billion ($2.5 billion) write-off of debt, Ryanair said in a statement. The Dublin-based carrier asked the Commission to investigate two years ago, it added. «The ongoing state aid to Alitalia is a perfect example of the commission’s bias towards inefficient national airlines,” Chief Executive Officer Michael O’Leary said in the statement. «We are calling on the Commission to end its discriminatory and biased approach to state aid enforcement.» Alitalia wasn’t immediately able to comment, a spokesman said. (Reuters, Bloomberg)