# C_2004262EN.01004802.xml

| 23.10.2004 | EN | Official Journal of the European Union | C 262/48 |
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23.10.2004

EN

Official Journal of the European Union

C 262/48

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Action brought on 29 July 2004 by Air Bourbon against the Commission of the European Communities

(Case T-321/04)

(2004/C 262/91)

Language of the case: French

An action against the Commission of the European Communities was brought before the Court of First Instance of the European Communities on 29 July 2004 by Air Bourbon, a company established in Sainte-Marie, La Réunion (France), represented by Sauveur Vaisse, lawyer.

The applicant claims that the Court should:

| — | annul Decision C (2003) 4708 final of 16 December 2003 by which the Commission authorised the French State to grant aid to Air Austral; |
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annul Decision C (2003) 4708 final of 16 December 2003 by which the Commission authorised the French State to grant aid to Air Austral;

| — | order the Commission and the French State to take the measures necessary to ensure that Air Austral repays the aid unduly received; |
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order the Commission and the French State to take the measures necessary to ensure that Air Austral repays the aid unduly received;

| — | order the Commission to pay Air Bourbon the sum of EUR 10 000 in respect of costs pursuant to Article 87(2) of the Rules of Procedure. |
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order the Commission to pay Air Bourbon the sum of EUR 10 000 in respect of costs pursuant to Article 87(2) of the Rules of Procedure.

Pleas in law and main arguments:

The applicant seeks the annulment of Decision C(2003) 4708 of 16 December 2003 by which the Commission considered, on the basis of Article 87(3) of the Treaty, that the aid granted to AIR AUSTRAL was compatible with the common market. Specifically it was an operating aid in the sum of EUR 1 950 536 in the form of a tax allowance in favour of taxpayers who invest in the refitting of two type B 777-2000 aircraft to be used to open the route between Paris and La Réunion and which, operating as a general partnership, will lease those aircraft to AIR AUSTRAL for five years and then transfer them to that company for an unknown sum.

The contested decision is based on the consideration that the aid in question is an operating aid which, under the Guidelines on national regional aid, may be authorised to offset part of the additional transport costs in the outermost regions, including La Réunion.

The applicant considers that the aid in question must be considered incompatible with the common market for the following reasons:

| — | the aid is an investment aid intended for the purchase of transport equipment, which is prohibited under those guidelines; |
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the aid is an investment aid intended for the purchase of transport equipment, which is prohibited under those guidelines;

| — | the aid is solely intended for AIR AUSTRAL and creates an imbalance between the distortions of competition and the benefits in terms of regional development; |
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the aid is solely intended for AIR AUSTRAL and creates an imbalance between the distortions of competition and the benefits in terms of regional development;

| — | the aid fails to comply with the principle of the non-aggregation of public funds, since AIR AUSTRAL has received public funds from the Region and Département of La Réunion which do not correspond to an investment made by a private investor operating under normal market conditions. Those funds moreover gave rise to excess supply on the air route between Paris and Saint Denis; |
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the aid fails to comply with the principle of the non-aggregation of public funds, since AIR AUSTRAL has received public funds from the Region and Département of La Réunion which do not correspond to an investment made by a private investor operating under normal market conditions. Those funds moreover gave rise to excess supply on the air route between Paris and Saint Denis;

| — | that aid upsets the balance which must exist between the benefits arising from the aid for the development of the region and the distortions to the conditions of competition between AIR AUSTRAL and the applicant. |
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that aid upsets the balance which must exist between the benefits arising from the aid for the development of the region and the distortions to the conditions of competition between AIR AUSTRAL and the applicant.

AIR BOURBON also submits that there has been an infringement of its rights of defence as guaranteed by Article 88(3) of the Treaty.

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