# C_2006060EN.01003902.xml

| 11.3.2006 | EN | Official Journal of the European Union | C 60/39 |
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11.3.2006

EN

Official Journal of the European Union

C 60/39

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Action brought on 25 November 2005 — Olympic Airlines S.A. v Commission

(Case T-416/05)

(2006/C 60/77)

Language of the case: Greek

Parties

Applicant: Olympic Airlines S.A. (Athens, Greece) (represented by: V. Christianos)

Applicant:

Defendant: Commission of the European Communities

Defendant:

Form of order sought

The applicant claims that the Court should:

| — | annul Article 1(1) and (4) and Article 2 of Decision C 11/2004 in so far as they concern the applicant; |
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annul Article 1(1) and (4) and Article 2 of Decision C 11/2004 in so far as they concern the applicant;

| — | order the Commission to pay the costs. |
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order the Commission to pay the costs.

Pleas in law and main arguments

In the context of the privatisation of the Greek State airline company, Olympic Airways, the applicant was put into operation. It constitutes a new company, and undertook flight operations, while Olympic Airways — Services S.A. (‘OA’), as the old company was renamed, retained all the other activities, principally ground handling, maintenance and repair of aircraft. By the contested decision, the Commission found that State aid had been paid by Greece to the applicant and OA, that aid being incompatible with the Treaty inter alia on the ground of:

payment on the part of the applicant for the subleasing of aircraft of rental lower than the lease payment under the principal leasing agreement, at the expense of the Hellenic Republic and OA;

| — | overvaluing of the applicant's assets at the time that it was set up; |
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overvaluing of the applicant's assets at the time that it was set up;

| — | the Hellenic Republic's display of unceasing tolerance towards OA as regards tax debts and social security contributions. |
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the Hellenic Republic's display of unceasing tolerance towards OA as regards tax debts and social security contributions.

| — | In its application, the applicant challenges, first, the part of the decision relating to the aircraft rental which it pays. It maintains that there is no State aid and that consequently the contested decision infringes Article 87(1) EC. According to the applicant, the Commission did not examine OA's choice to sublease aircraft on the basis of the criterion of a private businessman, nor did it examine whether the applicant obtained any benefit which it would not have obtained on the basis of market conditions. Moreover, it committed a manifest error of assessment in comparing the rental paid by the applicant with that paid by OA under the principal leasing agreement, rather than with that which the applicant would have to pay if it turned to another lessor. |
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In its application, the applicant challenges, first, the part of the decision relating to the aircraft rental which it pays. It maintains that there is no State aid and that consequently the contested decision infringes Article 87(1) EC. According to the applicant, the Commission did not examine OA's choice to sublease aircraft on the basis of the criterion of a private businessman, nor did it examine whether the applicant obtained any benefit which it would not have obtained on the basis of market conditions. Moreover, it committed a manifest error of assessment in comparing the rental paid by the applicant with that paid by OA under the principal leasing agreement, rather than with that which the applicant would have to pay if it turned to another lessor.

The applicant relies on similar arguments as regards the part of the contested decision that concerns the case of aircraft under the leasing system. Specifically on that point, the applicant relies inter alia again on manifest error of assessment and on the fact that the Commission wrongly considered that the applicant had entered into leasing agreements, whereas, it maintains, it had entered only into subleasing operation agreements.

The applicant also relies on a defective statement of reasons, as regards all the above findings of the Commission.

As regards the part of the decision which leads to the conclusion that the applicant constitutes OA's successor, the applicant claims that the Commission has made an error of assessment, since it did not take account of the fact that OA's activity continued, that there is no interdependence between the two companies and that a privatisation process is underway. The applicant also relies on a defective statement of reasons, because the Commission did not examine the criterion of the commercial logic of the operation, which, in the applicant's view, required the splitting off of the flights branch of OA, the creation of a new company and, subsequently, sale to the private sector

In connection with the finding in the contested decision of ‘unceasing tolerance’ on the part of Greece towards OA, the applicant claims infringement of Community law as regards the definition of State aid, because the Commission did not examine the conduct of Greece in the light of the criterion of a private creditor. It also claims that there are defects in the statement of reasons required and infringement of the principle of proportionality, in so far as the contested decision requires the applicant to return all unlawful aid granted up to the time it was split off, despite the fact that those amounts related to all the activities of the old company, most of which OA continues to carry out, while the applicant merely provides air transport services.

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