Now Air Lib!!!!
COMPANIES & FINANCE EUROPE: AirLib to face probe on state aid
By Daniel Dombey in Brussels and Martin Arnold in Paris
Financial Times; Jan 21, 2003
Air Lib, France's struggling second airline, will be formally investigated over allegations it
has benefited from illegal state aid, the European Commission is to announce as early as today.
The Commission believes Air Lib has benefited from several kinds of financial support from the
French state - some of them covert - since the demise in 2001 of Swissair, its former parent.
At issue is a €30m ($32m) loan granted to Air Lib, as well as €90m of unpaid taxes and charges,
which the Commission believes may amount to unpaid subsidies as rival carriers have alleged.
The Brussels-based executive argues it has never been fully informed about the money and the uses
it has been put to. It says it cannot judge whether funds merely intended to keep Air Lib alive
have instead been used to restructure the company.
Under European Union rules, governments can provide companies with emergency support for failing
companies as long as it is temporary and formal restructuring plans are submitted to the
Commission.
A similar investigation of Olympic Airways ended last month with a Commission demand that the
airline repay the Greek state €194m.
Separately, the French government is this week expected to announce whether it will accept the
latest version of a proposal aimed at rescuing Air Lib from bankruptcy.
Last week, Jean-Pierre Raffarin, the French prime minister, side-stepped a final decision on the
future of Air Lib by calling on a commercial court to appoint an independent arbitrator to work
towards a compromise acceptable to all sides.
Representatives of the airline, the transport ministry and Imca, the Dutch group that has emerged
as its most likely investor, were last night in talks onalast-minute compromise. A spokesman for
Air Lib said an announcement could come this morning.