Parties

Grounds

Operative part



Parties

In Case T‑301/01,

Alitalia – Linee aeree italiane SpA, established in Rome (Italy), represented by M. Siragusa, G.M. Roberti, G. Scassellati Sforzolini, F. Moretti and F. Sciaudone, lawyers,

applicant,

v

Commission of the European Communities, represented by V. Di Bucci, acting as Agent, and A. Abate and G. Conte, lawyers,

defendant,

APPLICATION for annulment of Commission Decision 2001/723/EC of 18 July 2001 concerning the recapitalisation of the company Alitalia (OJ 2001 L 271, p. 28),

THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Fifth Chamber, Extended Composition),

composed of M. Vilaras, President, M.E. Martins Ribeiro, F. Dehousse, D. Šváby and K. Jürimäe, Judges,

Registrar: C. Kantza, Administrator,

having regard to the written procedure and further to the hearing on 24 October 2006,

gives the following

Judgment

Grounds

Background to the dispute

1. Alitalia – Linee aeree italiane SpA (‘Alitalia’ or ‘the applicant’) is an airline in which approximately 90% of the capital was held on 1 July 1996 by the Italian State finance company Istituto per la ricostruzione industriale SpA (‘IRI’), the rest being held by private investors.

2. At the beginning of the 1990s, Alitalia suffered from undercapitalisation. During that period, it faced difficulties connected with the Gulf War, the recession in the airline sector in 1992 and 1993 and increased competition resulting from the liberalisation of the air transport market. As a result, the applicant was obliged to reduce its costs and improve its productivity but, despite those efforts, it was unable to return to profitability.

3. In the light of that situation, the applicant adopted in July 1996 a restructuring plan for the period 1996 to 2000. That plan, which the Italian authorities notified to the Commission by letter of 29 July 1996, consisted of a restructuring phase and a development phase. The financial component of the plan provided for a capital injection totalling 2 750 billion Italian lira (ITL) to be provided by IRI and to be paid in three instalments, the second instalment to be paid in May 1998 and the third in May 1999.

4. On 9 October 1996, the Commission decided to initiate the procedure provided for in Article 88(2) EC to examine the increases in capital envisaged in the plan (OJ 1996 C 346, p. 13). At various stages of the procedure, the Commission sought the advice of independent consultants (‘the Commission’s consultants’).

5. The original plan underwent a number of changes in the course of the procedure. The final version was sent to the Commission by the Italian authorities on 26 June 1997.

6. On 15 July 1997, the Commission adopted Decision 97/789/EC concerning the recapitalisation of the company Alitalia (OJ 1997 L 322, p. 44) (‘the 1997 decision’). The Commission considered that the injection of capital provided by IRI to Alitalia constituted State aid compatible with the common market, provided that the Italian authorities fulfilled 10 undertakings listed in Article 1 of the 1997 decision.

7. In view of new undertakings given by the Italian authorities following breaches of the conditions laid down in the 1997 decision which had come to light during the first six months after that decision had been adopted, the Commission did not raise any objections in its decision of 3 June 1998 to the payment of the third instalment of the capital injection by IRI.

8. By application lodged at the Registry of the Court of First Instance on 26 November 1997, Alitalia brought an action for annulment of the 1997 decision. In its judgment of 12 December 2000 in Case T‑296/97 Alitalia v Commission [2000] ECR II‑3871 (‘the Alitalia I judgmen t ’), the Court granted Alitalia’s action for annulment of the 1997 decision in view of the Commission’s failure to state the reasons for which it had used the same minimum rate of return (‘the minimum rate’) as that it had determined in Commission Decision 96/278/EC of 31 January 1996 concerning the recapitalisation of the company Iberia (OJ 1996 L 104, p. 25) (‘the Iberia decision’), manifest errors of assessment relating to the exclusion of the insolvency costs which IRI would have to bear in the event of Alitalia going into liquidation from the calculation of the internal rate of return (‘the internal rate’) and the failure to take account of the adjustments made to the restructuring plan in June 1997.

9. On 1 June 2001, at its request, the Commission’s consultants presented a report to it updating their previous analysis, which had been carried out in the course of the procedure leading to the adoption of the 1997 decision, so as to take account of the final version of the restructuring plan in calculating the minimum rate and the internal rate.

10. On 18 July 2001, the Commission adopted Decision 2001/723/EC concerning the recapitalisation of the company Alitalia (OJ 2001 L 271, p. 28) (‘the contested decision’).

The contested decision

11. Having stated in its legal assessment that Article 233 EC does not in this case require it to reopen the procedure which led up to the 1997 decision or to repeat the entire procedure before adopting a new decision, the Commission devotes 20 recitals (recitals 15 to 34 in the preamble to the contested decision) to an analysis of the criterion of the private investor.

12. With regard to the determination of the internal rate of the operation, the Commission is cognisant of the fact that the calculation of anticipated revenue should include the insolvency costs which IRI would have to bear if Alitalia were to go into liquidation. The Commission concludes its analysis by stating that the internal rate for IRI on its investment of ITL 2 750 billion in Alitalia capital is either 25.2% or 26.1% for 1997, according to the taxation applicable taken into account (recital 23 in the preamble to the contested decision).

13. With regard to calculating the minimum rate required by a private investor acting in accordance with market principles, on the basis of the information in its possession, and in particular the report produced by its consultants, the Commission considers the minimum rate to be around 30%, in view of the size of the sum involved and, more especially, the risks inherent in the operation which, despite improvements to the plan in June 1997, remain very high. It states in that connection that the risks inherent in the capital injection to Alitalia in July 1997 are at least as high as those involved in the capital injection received by Iberia in January 1996. In recitals 30 and 31 in the preamble to the contested decision, the Commission explains the ways in which the situation of those two undertakings is comparable, in spite of a number of specific differences.

14. In recital 33 in the preamble to the contested decision, the Commission concludes that the annual minimum rate which an investor acting in accordance with market principles would require in such circumstances in order to give Alitalia a capital injection of ITL 2 750 billion is higher than the internal rate for such an operation.

15. In its conclusion (recitals 35 to 37 in the preamble to the contested decision), the Commission considers that it has remedied the two errors of assessment and the failure to present a clear statement of reasons established by the Court in the Alitalia I judgment. As to the remaining reasoning for the contested decision, the Commission refers to the relevant paragraphs of the statement of reasons in the 1997 decision, which should, in its view, be deemed to form an integral part of the contested decision without there being any need to reproduce them (recital 36 in the preamble to the contested decision).

16. On the basis of that reasoning, the Commission adopted the contested decision, the operative part of which is as follows:

‘ Article 1

The aid granted by [the Italian Republic] to the company Alitalia … in the form of a capital injection of ITL 2 750 billion, payable in three instalments, intended to cover the restructuring of the company in accordance with the plan notified to the Commission on 29 July 1996 and adjusted on 26 June 1997, is compatible with the common market and the [European Economic Area] Agreement pursuant to Article 87(3)(c) [EC] and Article 61(3)(c) of the [European Economic Area] Agreement, subject to compliance with the obligations and conditions laid down in Articles 1, 2 and 3 of [the 1997] decision, as quoted in recital 1 of this Decision.

Article 2

The Commission has no objection to the payment of the second instalment of the capital injection to the company Alitalia …

Article 3

This Decision is addressed to the Italian Republic.’

17. The 10 conditions referred to in Article 1 of the contested decision, which are set out in recital 1 in the preamble to that decision, are as follows:

‘(1) to adopt the behaviour of a normal shareholder towards Alitalia; to enable it to be managed in accordance with commercial principles only and not to become involved in its management for reasons other than those strictly related to the Italian State’s status as a shareholder;

(2) not to grant Alitalia any further capital payment or any other aid in any form, including loan guarantees;

(3) that, until 31 December 2000, the aid shall be used by Alitalia solely for the purposes of restructuring the company and not for acquiring new shareholdings in other air carriers;

(4) not to give Alitalia priority in any way over other Community companies, in particular as regards the allocation of traffic rights (including those relating to third countries [outside] the European Economic Area), slot allocation, ground-handling assistance and access to airport facilities where preferential treatment would be contrary to Community law. In particular, the Italian authorities confirm that they will not apply any measure that is contrary to Community law and guarantee that:

(a) they shall immediately start and by 31 December 1998 at the latest shall have completed the procedure of revising Agreement No 4372 of 15 April 1992 …, as approved by Decree of 16 April 1992, in order to bring the Agreement in[to] line with Community regulations, in particular as regards the “right of priority”, “government interference”, “compatibility with the regulations on the liberalisation of air transport” and “airport privileges”;

(b) a de facto revision of the Agreement has already taken place with regard to the above points following the exchange of letters with Alitalia on the basis of Article 50 of the Agreement, the exchange making it clear that the Agreement applies only if it is compatible with Community law;

(c) Alitalia renounces its right of priority pursuant to Article 3 of the above Agreement;

(d) in coordinated or fully coordinated Italian airports, it will, before the start of the 1997-98 winter season, appoint a coordinator who does not have any link whatsoever with Alitalia and acts completely independently of it;

(5) [to guarantee] that, until 31 December 2000, the available capacity of aircraft operated by Alitalia or by other carriers under agreements whereby Alitalia assumes the commercial risk for such capacity (wet leasing, block space, joint venture agreements, etc.) shall not exceed the following limits:

(a) the number of seats available shall not exceed 28 985, of which 26 350 will be for Alitalia’s own fleet;

(b) the increase in the number of seat-kilometres available for each calendar year

– within the European Economic Area excluding Italy, and

– within Italy

shall not exceed 2.7%, on the understanding that no growth is to be authorised if the growth in the corresponding markets remains lower than 2.7%. However, if the growth rate in the corresponding markets exceeds 5%, supply may be increased, above 2.7%, by the percentage of the increase beyond 5%;

(6) [to ensure] that Alitalia shall have an analytical accounting system that makes it possible to determine, in the short term and for each route, a profitability ratio defined as the ratio between the full revenue and the full costs (the full cost being equivalent to the sum of the variable costs and fixed costs) for the particular route;

(7) [to guarantee] that, until 31 December 2000, Alitalia shall refrain from offering fares lower than those offered by its competitors for an equivalent service supplied on the routes which it operates;

(8) [to guarantee] that Alitalia shall dispose of its shareholding in Mal[é]v by … at the latest;

(9) [to guarantee] that Alitalia shall continue with the full implementation of the restructuring plan notified to the Commission on 29 July 1996 and adjusted on 26 June 1997, in particular as regards meeting the productivity, profitability and financial restructuring objectives set out in paragraph VI;

(10) to submit to the Commission, by the end of March 1998, March 1999, March 2000 and March 2001, an annual report on the progress of the restructuring plan, Alitalia’s economic and financial situation, and the compliance with these requirements. The report shall include a description (giving the particulars of co-contractors) of the commercial or operational cooperation agreements concluded by Alitalia during the previous year. The Commission shall, if necessary, have the information given in each of the reports checked by an independent consultant chosen by the Commission in agreement with the Italian Government.’

Procedure

18. By application lodged at the Registry of the Court of First Instance on 30 November 2001, Alitalia brought the present action.

19. On 13 February 2002, Alitalia also brought an action seeking to recover compensation in respect of damage suffered by it as a result of the adoption of the 1997 decision and the contested decision. However, it withdrew that action and the case was removed from the register by order of the President of the Third Chamber of the Court of First Instance of 8 April 2003 in Case T‑35/02 Alitalia v Commission (not published in the ECR).

20. By letter of 19 June 2002, the Commission notified the Italian Republic of its decision concerning the State aid registered under the numbers C 54/96 and N 318/02 relating, respectively, to the payment of the third instalment of aid for the restructuring of Alitalia, approved by the Commission on 18 July 2001, and new recapitalisation of EUR 1.432 billion (‘the decision of 19 June 2002’). The decision of 19 June 2002 was amended by Decision C (2002) 3151 final of 27 August 2002 and was published in the Official Journal of the European Communities on 4 October 2002 (OJ 2002 C 239, p. 2). By application lodged at the Registry of the Court of First Instance on 21 November 2002, Air One SpA, an Italian airline, sought annulment of the decision of 19 June 2002 (Case T‑344/02). Alitalia intervened in those proceedings in support of the forms of order sought by the Commission.

21. By joint application of 5 September 20 02, the parties requested that the present proceedings be stayed. The proceedings were stayed until 30 November 2002 by order of the Court of 19 September 2002.

22. An amendment to the contested decision was published in the Official Journal on 8 April 2003 (OJ 2003 L 90, p. 54). First, the last sentence of recital 20 in the preamble to the contested decision, which stated that Alitalia accepted the figure of ITL 750 billion for the total insolvency costs, was removed. Secondly, in the last sentence of recital 22 in the preamble to the contested decision, the figures for IRI’s participation in Alitalia on 31 December 2000 were amended.

23. By letter of 10 March 2004, the Court requested Alitalia to define its position on the assertion in the rejoinder lodged by the Commission on 24 April 2003 that Alitalia no longer had any interest in proceeding with the action. Alitalia responded to that request by letter of 1 April 2004.

24. Upon hearing the report of the Judge-Rapporteur, the Court decided to open the oral procedure and, by way of measures of organisation of procedure under Article 64 of the Rules of Procedure of the Court of First Instance, put written questions to Alitalia and to the Commission. The parties replied to those questions within the prescribed period.

25. The parties presented oral argument and their answers to the questions put by the Court at the hearing on 24 October 2006.

Forms of order sought by the parties

26. The applicant claims that the Court should:

– annul the contested decision in its entirety;

– in the alternative, annul Article 1 of the contested decision in so far as the Commission makes the compatibility of the disputed capital injection subject to compliance with the conditions imposed in the 1997 decision;

– order the Commission to pay the costs.

27. The Commission contends that the Court should:

– dismiss the action;

– order the applicant to pay the costs.

Admissibility

A – Arguments of the parties

28. The Commission submits in its rejoinder that Alitalia no longer has any interest in the action.

29. First of all, the Commission contends that the recapitalisation of Alitalia was fully authorised and achieved since, in the decision of 19 June 2002, it did not raise any objections to the payment of the third and final instalment of the aid. Alitalia would therefore not gain any benefit at all from the annulment of the contested decision. On the contrary, such an annulment would deprive the decision of 19 June 2002 of its legal basis.

30. Secondly, the Commission observes that the present action could not facilitate an action for damages, since Alitalia withdrew the claim it brought for that purpose in Case T‑35/02.

31. Lastly, the Commission points out that an action, registered under number T‑344/02 and still pending before the Court, was brought by Air One against the decision of 19 June 2002 and that Alitalia intervened in those proceedings in support of the forms of order sought by the Commission. It therefore takes the view that, if Alitalia wishes to maintain the decision of 19 June 2002, it must accept the consequences with regard to the present action.

32. In its reply of 1 April 2004 to the questions put by the Court concerning the Commission’s claim that it no longer had an interest in bringing proceedings, Alitalia submits that a judgment declaring that the contested capital injection was not State aid would enable it to seek such aid in the future. By contrast, the contested decision deprived it of such a possibility, since, in normal circumstances, it could not be granted any further aid. Moreover, the effect of such a judgment would be that the payment of the third instalment of the contested capital injection should not have been subject to prior authorisation by the Commission.

33. In addition, according to Alitalia, the judgment to be given by the Court in the present case will have an impact on Case T‑344/02. If the contested capital injection were no longer to be classified as State aid, a number of Air One’s pleas in law would be doomed to fail.

34. Lastly, Alitalia submits that the fact that it withdrew from Case T‑35/02 does not preclude it from bringing a new claim for damages, since the limitation period for instituting such an action has not expired. In any event, a judgment annulling the contested decision in the present case would strengthen its position in any new claim for damages that it might bring to obtain compensation for the loss arising from the contested decision.

B – Findings of the Court

35. For the purposes of considering the admissibility of this action, it must be observed that, according to settled case-law, an action for annulment brought by a natural or legal person is not admissible unless the applicant has an interest in seeing the contested measure annulled. That interest must be vested and present (see Case T‑141/03 Sniace v Commission [2005] ECR II‑1197, paragraph 25 and the case-law cited).

36. In order for such an interest to be present, the annulment of the measure must of itself be capable of having legal consequences or, in accordance with a different form of words, the action must be liable, if successful, to procure an advantage for the party who has brought it (see Case T‑310/00 MCI v Commission [2004] ECR II‑3253, paragraph 44 and the case-law cited).

37. The conditions governing the admissibility of an action must be judged, subject to the separate question of the loss of an interest in bringing proceedings, at the time when the application is lodged (see Case T‑131/99 Shaw and Falla v Commission [2002] ECR II‑2023, paragraph 29 and the case-law cited). However, in the interest of the proper administration of justice, that consideration relating to the time when the admissibility of the action is assessed cannot prevent the Court from finding that there is no longer any need to adjudicate on the action in the event that an applicant who initially had a legal interest in bringing proceedings has lost all personal interest in having the contested decision annulled on account of an event occurring after that application was lodged. For an applicant to be entitled to pursue an action seeking the annulment of a decision, he must retain a personal interest in the annulment of the contested decision (see the order in Case T‑28/02 First Data and Others v Commission [2005] ECR II‑4119, paragraphs 36 and 37 and the case-law cited).

38. Clearly, the Commission did not dispute Alitalia’s interest in bringing proceedings in its defence of 25 March 2002. Moreover, the Court stated in the Alitalia I judgment (paragraph 74) as follows:

‘… [T]he fact that the Commission, in the [1997] decision, classified IRI’s investment in the applicant as State aid clearly operated to the applicant’s detriment. It meant that the Commission was able, in the [1997] decision, to examine the compatibility of the measure with the common market and to impose conditions directly affecting the applicant’s operations.’

39. In its rejoinder of 24 April 2003, the Commission submitted that Alitalia had lost any interest in bringing proceedings on account of new circumstances which had arisen since that time. Those are, first, the decision of 19 June 2002, in so far as the Commission elected, in particular, in that decision not to raise any objections to the payment of the third instalment of aid to Alitalia and, secondly, the order of 8 April 2003 in Case T‑35/02 Alitalia v Commission , referred to in paragraph 19 above, by which the President of the Third Chamber of the Court ordered the removal of Case T‑35/02 from the register, following Alitalia’s withdrawal.

40. In the decision of 19 June 2002, the Commission decided to ‘formally acknowledge payment of the second instalment of the aid granted to [Alitalia], which was authorised by the 1997 decision and confirmed in 2001, and not to raise any objections to the payment of the third instalment’. Alitalia therefore received all of the aid in question. It was no longer subject to the obligations and conditions that were to be complied with during the period in which the plan was being implemented.

41. However, the effect of the contested decision, which continues to classify the contested capital injection as State aid, is to make payment of the third instalment of aid subject to authorisation by the Commission. The contested decision therefore forms the legal basis of the decision of 19 June 2002 in so far as the Commission did not, in that decision, raise any objections to that third payment.

42. Accordingly, if the Court were to annul the contested decision on the ground that it classifies the contested capital injection as State aid, such an annulment would have legal consequences for the decision of 19 June 2002, which would have no legal basis.

43. The parties disagree as to the exact nature of those consequences.

44. According to Alitalia, if the contested decision were annulled, the decision of 19 June 2002 would be devoid of purpose as regards the payment of the second and third instalments of the aid in question and the pleas put forward in that regard by Air One in its action against the decision of 19 June 2002 in Case T-344/02 would be ineffective. Air One would therefore no longer be able to challenge those payments.

45. For its part, the Commission argues that, if the contested decision were annulled, it would have to re-examine the new Alitalia recapitalisation plan for 2002 to determine whether it constituted State aid.

46. Clearly, in both cases, in so far as it concerns the payments of aid in question, Air One’s action against the decision of 19 June 2002 could no longer succeed, since it would have no legal basis.

47. Alitalia therefore maintains an interest in bringing proceedings and there is no need to examine the other arguments submitted in that regard.

Substance

48. Alitalia relies, essentially, on six pleas in law. The first plea alleges procedural defects, the second infringement of the rights of defence, the third infringement of Article 233 EC on the ground that the contested decision does not comply with the Alitalia I judgment, the fourth infringement and misapplication of Articles 87 EC and 88 EC in the application of the private investor test, the fifth infringement of Article 87(3) EC in laying down the conditions for granting the aid, and the sixth infringement of Article 253 EC. It is appropriate to consider first of all the sixth plea, alleging infringement of the obligation to state reasons.

A – The plea alleging infringement of the obligation to state reasons

49. This plea can be divided essentially into two parts, the first relating to the grounds of the conclusions in the contested decision and the second to the conditions imposed in that decision.

1. Insufficient reasons given for the conclusions in the contested decision

a) Arguments of the parties

50. Drawing attention to the case-law on the obligation incumbent upon the Community institutions to give reasons for their acts, particularly in matters of State aid, Alitalia argues that the contested decision cannot rely on the 1997 decision because the Court of First Instance annulled that decision, which has retroactive effect. Consequently, the contested decision must establish its own legitimacy independently.

51. It is not at all clear, in any event, how the Commission applied the criterion of the private investor operating on market principles in the contested decision. As regards the minimum rate, the Commission simply makes a comparison with the situation in the Iberia decision. In the contested decision, no reference is made to the fact that financial investors were consulted on the final version of the restructuring plan. No account was taken of the final content of the programme. Alitalia refers, in particular, to the acceleration of the plan to set up Alitalia Team SpA (a low-cost company), the ground-handling agreements, the implementation of the fares initiatives and to redundancies – a whole number of features whose impact, in its view, could have been assessed, since six months had passed since the beginning of the implementation of the plan.

52. As regards the internal rate, Alitalia submits that the contested decision is so lacking in transparency that the Court itself will have to have recourse to additional information to be able to review whether the Commission’s arguments are well founded. Insufficient indications were given for it to be possible to assess the calculation of the final value of Alitalia or that of the insolvency costs which IRI would have to bear in the event of Alitalia going into liquidation.

53. Alitalia maintains that the Commission could have annexed the June 2001 report of its consultants to the contested decision or incorporated the salient parts of that report into the body of the decision.

54. Alitalia concludes that the contested decision is seriously vitiated by a failure to state adequate reasons and thus infringes Article 253 EC.

55. Throughout its written pleadings, the Commission disputes the claim that the statement of reasons in the contested decision is inadequate. It adds that the pleas in law and arguments put forward by Alitalia demonstrate that the statement of reasons fully served its purpose, namely by enabling the persons concerned to understand the manner in which the Commission has applied the Treaty and, where necessary to defend their rights, while at the same time permitting the Community judicature to exercise its power of review.

b) Findings of the Court

56. According to settled case‑law, the question whether the statement of the grounds for a decision meets the requirements of Article 253 EC must be assessed with regard not only to its wording but also to its context and all the legal rules governing the matter in question. While the Commission, in the statement of reasons for a decision, is not required to address all the issues of fact and law raised by interested parties during the administrative procedure, it must none the less take account of all the circumstances and all the relevant factors of the case so as to enable the Court to review its lawfulness and make clear to the Member States and the persons concerned the circumstances in which the Commission has applied the Treaty (see Joined Cases T‑371/94 and T‑394/94 British Airways and Others v Commission [1998] ECR II‑2405, paragraph 94 and the case-law cited).

57. The answer to the question whether a Community measure fulfils the obligation laid down in Article 253 EC to state the reasons on which it is based depends on the nature of the act in question and on the context in which it was adopted. Thus, where the party concerned was closely involved in the process by which the contested decision came about and is therefore aware of the reasons for which the administration considered that the request should not be granted, the scope of the obligation to state reasons will be defined by the context thus created by the party’s involvement in that process. In such circumstances, the requirements of the applicable case-law are considerably relaxed (see Case T‑504/93 Tiercé Ladbroke v Commission [1997] ECR II‑923, paragraph 52 and the case-law cited).

58. For the purpose of examining whether the obligation to state reasons was satisfied in the present context, it should be pointed out that the procedure for reviewing State aid is a procedure initiated in respect of the Member State responsible for granting the aid and that the parties concerned within the meaning of Article 88(2) EC, which include the recipient of the aid, cannot themselves seek to debate the issues with the Commission in the same way as may that Member State (see Case T‑198/01 Technische Glaswerke Ilmenau v Commission [2004] ECR II‑2717, paragraph 61 and the case-law cited).

59. It is in the light of those principles that it is necessary to consider whether the statement of grounds for the contested decision meets the requirements of Article 253 EC.

60. Clearly, the facts and considerations having decisive importance in the context of the contested decision which enable the circumstances in which the Commission made a fresh application of the criterion of the private investor operating on market principles, following the annulment by the Court of the 1997 decision, to be clearly ascertained are set out in the contested decision itself (see, to that effect, Joined Cases T‑374/94, T‑375/94, T‑384/94 and T‑388/94 European Night Services and Others v Commission [1998] ECR II‑3141, paragraph 95).

61. As regards the grounds for the determination of the minimum rate, it is necessary to refer first of all to recitals 24 to 29 in the preamble to the contested decision, which set out the reasons relating to the specific situation of Alitalia which justify setting the minimum rate at 30%. Before specifying the risks that are particular to the undertaking, recital 25 in the preamble to the contested decision begins as follows:

‘In this case, on the basis of the information in its possession and, in particular, the consultants’ report, the Commission considers the minimum rate to be around 30% in view of the size of the sum involved and, more especially, the risks inherent in the operation. This rate of at least 30% allows for the possibility that the restructuring plan will not develop as planned and that the actual return on the investment will, in the final analysis, be significantly less. Indeed, the rate cannot fail to be higher than the cost of equity capital since the latter does not take account of all the risks associated with the company, for, despite the improvements following adjustments to the restructuring plan in February and June 1997, as notified to the Commission on 26 June 1997, Alitalia must still be considered a company with a very high specific risk. …’

62. In recitals 30 and 31 in the preamble to the contested decision, the Commission also gives the reasons for the minimum rate being fixed in the present case by comparison with the rate it established in the Iberia decision (see paragraphs 109 to 111 below).

63. Moreover, the contested decision contains a formal statement of the reasons as to the account taken of the final version of the restructuring plan in assessing the minimum rate.

64. Recital 27 in the preamble to the contested decision states as follows:

‘The latest amendments made by the Italian authorities to the restructuring plan in June 1997, as notified to the Commission on 26 June 1997, are not such as to invalidate the calculation of the [minimum] rate. In addition to the Italian authorities’ decision that Alitalia should bear employees’ early retirement costs, the amendments include taking faster action to cut company expenditure by transferring Alitalia personnel to Alitalia Team more quickly than anticipated, reducing the total amount of the capital injection from ITL 2 800 to ITL 2 750 billion, and releasing Alitalia’s shares in the Hungarian company, Mal[é]v, and in six regional Italian airports. While they undoubtedly reduce the inherent risks of the operation and increase the rate of return on the capital injection, these amendments are none the less not very significant and have far less impact than the earlier amendments by the Italian authorities to the restructuring plan in February 1997. Indeed, the June 1997 amendments have very little impact on the main results of the plan and on the expected share dividends …’

65. The contested decision then sets out a table evaluating that impact. Reasons are therefore also given concerning that point in the contested decision.

66. The reasons for the determination of the internal rate are to be found in recitals 19 to 23 in the preamble to the contested decision, which set out the factors on which the Commission based its calculation, recital 20 covering the insolvency costs and recital 22 the final value, in particular.

67. Moreover, Alitalia was closely involved in the procedure which led to the adoption of the 1997 decision, a procedure which was not annulled by the Court (see paragraphs 96 to 101 below). Alitalia had access, in particular, to the second and third reports of the Commission’s consultants, which it annexes to its application in this case.

68. Alitalia’s contention that the Commission could have annexed its consultants’ report of 1 June 2001 to the contested decision is irrelevant in the present case for the purpose of substantiating its argument alleging a failure to state reasons. In so far as it alleges infringement of the rights of defence, that contention will be examined in paragraphs 164 to 177 below.

69. Account must also be taken of the fact that the contested decision was adopted after the 1997 decision and after a judgment of the Court annulling that decision, namely the Alitalia I judgment (see, to that effect, Case C‑56/93 Belgium v Commission [1996] ECR I‑723, paragraph 87). The Alitalia I judgment sets out the facts of the case (paragraphs 1 to 12), the administrative procedure which led to the adoption of the 1997 decision (paragraphs 13 to 35) and the content of the 1997 decision (paragraphs 36 to 48). The contested decision was therefore adopted in a context which was well known to the applicant (see, to that effect, Case T‑17/02 Olsen v Commission [2005] ECR II‑2031, paragraph 97).

70. Consequently, the contested decision clearly contains sufficient reasoning as regards the factors referred to by Alitalia in the first part of the plea, namely the determination of the minimum rate and the internal rate and, lastly, the manner in which the criterion of the private investor operating on market principles was applied.

71. As to the remainder, in so far as Alitalia disputes the merits of the reasons given for the determination of the minimum rate and the internal rate, reference should be made to paragraphs 178 to 370 below.

2. Failure to give adequate reasons in the contested decision for the conditions imposed in the 1997 decision

a) Arguments of the parties

72. Alitalia argues that the contested decision is not based on any adequate reasoning as regards the conditions under which the contested capital injection was to be regarded as compatible with the common market. It adds that the Commission cannot contend that the reasons given in 1997 remained valid in 2001, since the difference between the minimum rate and the internal rate was no longer 10% but only 3.9%. There is no assessment of that factor in the contested decision. Alitalia states that it does not challenge the conditions as they were imposed in the 1997 decision but claims that the Commission could not reimpose those same conditions in connection with the contested decision without giving adequate reasons for so doing.

73. The Commission replies that it proceeded on the basis of stating reasons by reference to other documents, as is evidenced by recitals 1 to 36 in the preamble to the contested decision. Moreover, the conditions are in fact undertakings given by the Italian authorities and cannot be attributed to the Commission, so no reasons need be given in that regard. The Commission adds that, although set out on the basis of references to other documents, the grounds for the contested decision did not prevent Alitalia from understanding the essential basis of the decision.

b) Findings of the Court

74. The conditions under which the contested capital injection was to be regarded as compatible with the common market, as set out in the 1997 decision, are reproduced in recital 1 in the preamble to the contested decision. Moreover, as for grounds of the decision, the Commission makes express reference, in recital 36 in the preamble to the contested decision, to ‘the relevant paragraphs of the statement of reasons in the 1997 decision’.

75. Alitalia states that, obviously, it does not challenge the conditions as they were imposed in the 1997 decision but claims that the Commission could not reimpose those same conditions in connection with the contested decision without giving adequate reasons for so doing.

76. Clearly, therefore, the second part of this plea, which is raised in a general form by Alitalia, does not relate to the form, which it does not dispute, but to the substance of the reasons given for imposing the same conditions in the contested decision as those imposed in the 1997 decision. That part of the plea must therefore be examined in the context of paragraphs 399 to 418 below. Where necessary, that issue will be addressed in greater detail in the course of the examination of each of those conditions in response to some specific criticisms of the statement of reasons formulated by Alitalia which are outside the scope of this plea.

77. Alitalia has therefore failed to establish in this general plea that the statement of reasons for the contested decision is inadequate and, accordingly, that plea must be rejected in its entirety.

B – The plea alleging infringement of Article 233 EC

78. Alitalia alleges that the Commission infringed Article 233 EC both in the context of the first part of its first plea, on the ground that it failed to initiate a new investigation procedure, and in the context of its third plea. It is appropriate to consider those points together.

1. Arguments of the parties

79. Alitalia submits that, as a consequence of a judgment annulling a decision, the defendant institution is required, by virtue of Article 233 EC, to take the necessary measures to reverse the effects of the illegalities as found in the judgment. In the case of an act that has already been executed, this may take the form of restoring the applicant to the position he was in prior to that act.

80. According to Alitalia, it has been consistently held in case-law that the institution is required under Article 233 EC to comply with the annulment judgment by having regard to both the operative part and the grounds of the judgment and by assessing very carefully the effects of the annulment judgment on the earlier stages of the procedure. The institution may resume the procedure from the point at which the defect which was criticised by the Court arose only if a formal or procedural defect is involved. The institution is obliged to reopen the procedure ab initio where it does not have the information necessary to carry out a new assessment of the case that has been investigated.

81. In the present case, according to the applicant, the defects criticised by the Court in the Alitalia I judgment were substantive, so that the Commission was obliged to instigate a new investigation procedure.

82. In support of that contention, Alitalia claims, first of all, that the Court criticised the Commission’s substantive assessments on two fundamental points, namely the failure to take account of the insolvency costs and of the final version of the restructuring plan submitted in June 1997.

83. Moreover, according to Alitalia, the Commission should in any event have reopened the formal investigation procedure under Article 88(2) EC because it did not have available to it a full and undisputed range of information and the assessment as to whether the aid was compatible with the common market created serious difficulties which were not overcome during the preliminary stage. Alitalia considers, in particular, that a new survey among institutional investors was necessary to determine the minimum rate. In its view, in order to obtain new analytical data, the Commission should also have had recourse to new technical expertise and engaged in a discussion of the issues with Alitalia and the Italian authorities.

84. The Commission also infringed Article 233 EC by clearly distorting the content of the Alitalia I judgment, with which the contested decision did not comply.

85. Thus, in the contested decision, the insolvency costs were assessed at ITL 750 billion whereas, according to the Alitalia I judgment, they were ITL 1 140 billion. That figure of ITL 750 billion was not the subject of any discussion, did not feature in the 1997 decision and was not accepted by Alitalia.

86. As regards the final version of the restructuring plan, Alitalia submits that, in order to comply with the Alitalia I judgment, the Commission, in revising its calculations to take account of that version of the plan, was obliged to proceed on the basis of the by then irrefutable assumption that that plan would enhance the viability of the contested operation and reduce the inherent risks. Alitalia claims that the internal rate should consequently have been increased and the minimum rate decreased. In Alitalia’s view, the Commission could not therefore have concluded that the final amendments to the plan had ‘very little impact’ on the abovementioned parameters and left the calculations unaltered.

87. In particular, as regards the risks, the Commission did not quantify the impact of the final amendments to the restructuring plan. The minimum rate therefore remained unchanged. Moreover, the Commission did not repeat the stages which had led it initially to set that rate at 30%. Nor did it alter its assessment regarding the similarity between the respective situations of Alitalia and Iberia or seek any further expert advice.

88. With regard to the internal rate, Alitalia observes that the rate of 26.1% which appears in recital 23 in the preamble to the contested decision is the same as the rate obtained at the conclusion of the calculation annexed to the rejoinder by the Commission in Case T‑296/97. That calculation was therefore simply ‘recycled’ in the contested decision and fails to take account of all the elements in the final version of the restructuring plan.

89. Moreover, the comments of the Court on the failure to give adequate reasons for transposing the minimum rate applied in the Iberia decision to Alitalia in the 1997 decision calls into question the very basis of the Commission’s reasoning. According to Alitalia, in the Alitalia I judgment, the Court did not confine itself to criticising the 1997 decision on the ground that it was insufficiently reasoned. It criticised the very fact that a comparison was made between Alitalia and Iberia. The Court found that there was a real contradiction between, on the one hand, the Commission’s decision to adopt for Alitalia the same minimum rate applied in the Iberia decision and, on the other hand, the assessments made by the Commission and its consultants of the less-serious risks posed by Alitalia’s restructuring plan in comparison with the Iberia plan. Accordingly, the Court found that it was not appropriate to fix the minimum rate applicable to Alitalia at 30% by reference to the rate applied to Iberia. The contested decision is therefore, by implication, in conflict with the Alitalia I judgment and does not, as required under Article 233 EC, comply with it. In putting forward new reasons to support that disproportionate minimum rate, the Commission thus created new grounds of justification which it had never presented in the course of the administrative procedure and the Court must therefore reject them.

90. The Commission contends that Alitalia’s objections are based on a misunderstanding of the scope and effects of the Alitalia I judgment and of the obligations imposed on the Commission by Article 233 EC. The effect of the judgment delivered by the Court was to annul only the final assessment carried out by the Commission and not the investigation procedure which led to the adoption of the 1997 decision. The unlawfulness of the 1997 decision does not extend to the preparatory acts, with the effect that the Commission could and indeed should have resumed the investigation procedure precisely from the point at which the unlawful act had occurred, namely when the 1997 decision was definitively adopted.

91. In particular, the Court confined itself in the Alitalia I judgment to criticising a flaw in the reasoning and did not dispute that the situations of Alitalia and Iberia were comparable. In addition, the decision in the contested decision to retain a minimum rate of 30% was based on Alitalia’s particular situation and it is not the case that it was repeated purely by reference to the Iberia case.

92. It is apparent from recital 20 in the preamble to the contested decision that the insolvency costs were included in the calculation of the internal rate. The Commission states that the table which it prepared in Case T‑296/97, which was annexed by Alitalia to its application in the present case, already indicated that those costs had been included in the calculation of the internal rate. The Commission explains that it believed that it was possible for it to deduce that Alitalia agreed with the sum of ITL 750 billion from the fact that it had not disputed that figure in Case T‑296/97 and had, moreover, referred to it in its pleadings. The Commission now notes that that is not the case while at the same time maintaining that it is irrelevant in the present case, since it did not form the basis of the reasoning given in the contested decision. The Commission also states that the reasons for which it set those costs at ITL 750 billion are set out in recital 20 in the preamble to the contested decision and were presented in its consultants’ reports of 21 February and 18 June 1997, which are annexed by Alitalia to its application.

93. The Commission claims that it re-examined the internal rate and the minimum rate in the light of the amendments to the final version of the restructuring plan. It observes that the internal rate, which was set at 20% in the 1997 decision, was set at 26.1% in the contested decision as a result of including the insolvency costs in the calculations. The Commission specified the relevant components of the calculation in recitals 19 to 23 in the preamble to the contested decision.

94. The Commission goes on to state that the determination of the minimum rate depends, inter alia, on subjective factors, such as the investor’s attitude towards risk, so that any consultation carried out subsequently would have been distorted by knowledge of developments in the sector in general and the undertaking concerned in particular. Nevertheless, the Commission’s consultants actually took the amendments to the final version of the restructuring plan into account and came to the view that the economic and financial effects of those amendments were not such as to change the minimum rate, originally set at 30%.

95. The Commission also points out that setting a minimum rate that w ould be required by a private investor is a question of making a forecast and not a subsequent assessment. It follows that the results for 1997 could not have been taken into account.

96. In any event, the Commission claims that, even if there is a substantive defect in the annulled act, it is possible to base a new decision on a review procedure followed previously, where the facts to be assessed are exactly the same as those already examined in the initial decision. It submits that it would have been unrealistic to carry out a new investigation involving institutional investors in 2001 in order to determine retrospectively the minimum rate they would have considered appropriate had their opinion been sought in 1997 in the light of the final amendments to the restructuring plan.

2. Findings of the Court

97. Pursuant to Article 233 EC, the institution whose act has been declared void is required to take the necessary measures to comply with the annulment judgment.

98. In order to comply with an annulment judgment and to implement it fully, the institutions are required to have regard not only to the operative part of the judgment but also to the grounds which led to the judgment and constitute its essential basis, in so far as they are necessary to determine the exact meaning of what is stated in the operative part. It is those grounds which, on the one hand, identify the precise provision held to be illegal and, on the other hand, indicate the specific reasons which underlie the finding of illegality contained in the operative part and which the institutions concerned must take into account when replacing the annulled measure (Joined Cases 97/86, 99/86, 193/86 and 215/86 Asteris and Others v Commission [1988] ECR 2181, paragraph 27).

99. The procedure for replacing such a measure may thus be resumed at the very point at which the illegality occurred (see Case C‑458/98 P Industrie des poudres sphériques v Council [2000] ECR I‑8147, paragraph 82 and the case-law cited).

100. According to established case-law, annulment of a Community measure does not necessarily affect the preparatory acts (Case C‑415/96 Spain v Commission [1998] ECR I‑6993, paragraph 32; see also, to that effect, Case C‑331/88 Fedesa and Others [1990] ECR I-4023, paragraph 34). The annulment of an act concluding an administrative proceeding which comprises several stages does not necessarily entail the annulment of the entire procedure prior to the adoption of the contested act, regardless of the grounds, procedural or substantive, of the judgment pronouncing the annulment (see Case T‑2/95 Industrie des poudres sphériques v Council [1998] ECR II‑3939, paragraph 91 and the case-law cited).

101. Where, in spite of the fact that investigation measures have been taken allowing an exhaustive analysis to be made of the compatibility of the aid, the analysis carried out by the Commission is incomplete, thus making the decision unlawful, the procedure for replacing that decision can be resumed at that point by means of a fresh analysis of the investigation measures (see, to that effect, Spain v Commission , paragraph 34).

102. Since the operative part of the Alitalia I judgment contains a decision of invalidity, it is in the light of those principles identified by the case-law that it is necessary to determine whether, in the contested decision, the Commission took the necessary measures to comply with the judgment and, as part of that analysis, to examine in particular whether the grounds of that judgment placed the Commission under an obligation to resume the whole procedure from the beginning.

103. First of all, it must be noted that, contrary to Alitalia’s submissions, case-law does not dictate that it is not necessary for the entire procedure prior to the adoption of a measure adopted in replacement of another to be repeated only where that measure was annulled on the ground of procedural defects (Case T‑2/95 Industrie des poudres sphériques v Council , paragraph 91).

104. In the Alitalia I judgment, the Court clearly stated that ‘[t]he method which the Commission employed in the [1997] decision cannot be criticised as such’ (paragraph 99). However, the Court annulled the 1997 decision on the ground that it was vitiated by ‘an error of reasoning in so far as it adopt[ed] for IRI’s investment the same minimum rate as that determined in the Iberia decision’ (paragraph 137). It also annulled the 1997 decision on the ground that the Commission had made manifest errors of assessment in considering, first of all, ‘on the basis of the reasons put forward in the [1997] decision, that the insolvency costs relating to the loans granted by Cofiri [a company forming part of the IRI group] should be excluded from the calculation of the internal rate’ (paragraph 150) and, secondly, ‘that the adjustments made to the restructuring plan in June 1997, which, on its own admission, reduced the risks inherent in that plan and further increased the profitability of the undertaking, had no impact on the calculation of the minimum rate and the internal rate and, accordingly, on the appraisal of whether IRI’s investment satisfied the private investor test’ (paragraph 169).

105. It is necessary to examine the grounds which led the Court of First Instance to those conclusions in the Alitalia I judgment.

106. With regard, in the first place, to the failure to state adequate reasons for the setting of the minimum rate, it must be noted that, before examining that plea, which was raised by the applicant, the Court considered and rejected the applicant’s complaints concerning the factors on which the Commission and its consultants based their decision in setting the minimum rate. In particular, the Court stated that ‘none of the matters put forward by the applicant [gave] any reason to doubt that the experts consulted by [the Commission’s consultants] did not have the information necessary to assess the minimum rate in the present case’ (paragraph 121).

107. In examining the failure to state adequate reasons, after setting out the considerations which led the Commission to fix the minimum rate at 30% in the Iberia decision (paragraph 128), the Court stated that, throughout the administrative procedure, the applicant had maintained that its situation was not comparable to Iberia’s situation, insisting, in particular, that the elements of uncertainty that characterised the Iberia case did not apply in its case (paragraph 131). However, the Court found that ‘the Commission did not explain in the [1997] decision why it considered it necessary to apply to IRI’s investment the same minimum rate of 30% as it had adopted in the Iberia decision although the findings made in the [1997] decision [gave] the impression, in particular, that a number of the risk factors which [had] led the Commission, in the Iberia decision, to fix the minimum rate at that level, which was very high and far higher than market rates, were not present, or were present to a lesser extent, in the Alitalia case’ (paragraph 136). The Court concluded from this that the 1997 decision was vitiated by defective reasoning.

108. It is apparent from the examination of the first ground of annulment that it does not call into question the review procedure which resulted in the fixing of the minimum rate at 30%. Nor, contrary to Alitalia’s submissions, did the Court consider that the minimum rate could not have been fixed at 30% or invalidate any comparison between Iberia and Alitalia. It follows that the first ground on which the Court annulled the 1997 decision did not preclude the possibility that the measure could be remedied on the basis of available information if a more detailed statement of reasons were given.

109. In the contested decision, after describing at length, in recitals 25 to 29 in the preamble, the reasons, relating to the specific situation of Alitalia, justifying the fixing of the minimum rate at 30% and stating, in recital 30, that that rate was the same as that applied by the Commission in the Iberia decision, the Commission explains why it ‘considers that the risks inherent in the capital injection to Alitalia in July 1997 are at least as high as those involved in the capital injection received by Iberia in January 1996’. The Commission pursues the comparison further in recital 31 in the preamble to the contested decision.

110. In that connection, with regard to the social situation of the two companies which was referred to by the Court in the Alitalia I judgment, the Commission now states that it is ‘[a]nother feature the two companies have in common, from an investor’s point of view’. It claims that ‘[t]he investor would no doubt observe that, in both cases, both sides of industry have made commitments to a certain extent to accepting improvements in productivity and reductions in production costs, but would consider more importantly the social disputes experienced by both airlines in the years leading up to the capital injection as well as the challenge facing both companies of transforming their business culture, adapting the characteristics of a public body that has enjoyed a long period of monopoly to the new market conditions’ (recital 31 in the preamble to the contested decision).

111. Next, with regard to whether the Alitalia restructuring plan was realistic when compared with the uncertainty that characterised the recapitalisation of Iberia, a difference which was also referred to by the Court in the Alitalia I judgment, the Commission explained, again in recital 31 in the preamble to the contested decision, that ‘a hypothetical investor would see the risk factors involved in Iberia’s situation as being more than outweighed by the twofold uncertainty of Alitalia’s situation with regard to the conditions of the company’s development at Malpensa airport (a key part of the plan) and with regard to the effects of the liberalisation of Italy’s internal civil aviation market’. It points out, in that regard, that ‘[t]he Spanish internal civil aviation market was actually liberalised several years before the Italian internal market and [that], in 1996, it [was] already possible to see its impact on Iberia, whilst in 1997 the effects of the liberalisation of the Italian internal market on Alitalia [were] still very hard to identify’. The Commission adds that ‘Iberia has a privileged position in the market for routes between Europe and Latin America, whilst Alitalia has no such advantage’.

112. In the light of the foregoing considerations, the Commission must be regarded as having complied with Article 233 EC, since it provided an adequate statement of reasons in the contested decision.

113. In the second place, as regards the two manifest errors of assessment, the Court held, first of all, in the Alitalia I judgment that ‘in the [1997] decision the Commission state[d] that, for the purpose of calculating the internal rate, … it [was] not necessary to include … the costs which IRI [would] have to bear in the event of Alitalia’s bankruptcy’ (paragraph 142). It then set out the reasons given by the Commission for excluding the insolvency costs (paragraph 144) before going on to reject them, and added that the Commission’s reasoning concerning the insolvency costs was circular (paragraphs 146 to 149). The Court concluded from this that ‘the Commission [had] made a manifest error of assessment in considering, on the basis of the reasons put forward in the [1997] decision, that the insolvency costs relating to the loans granted by Cofiri should be excluded from the calculation of the internal rate’ (paragraph 150). The Court then rejected the applicant’s argument that the internal rate was incorrectly calculated because the Commission obliged it to assume the cost of the early retirement of 700 of its staff (paragraphs 152 to 156).

114. It is clear that in the Alitalia I judgment, without calling into question the review procedure or the accuracy of the basic data collected in the course of that procedure, in particular that relating to the insolvency costs, the Court declared the failure to take account of the insolvency costs in calculating the internal rate unlawful.

115. That error in the selection and final processing of the available information could have been remedied by including those costs in the calculation of the internal rate. The Commission was therefore correct in stating, in recital 20 in the preamble to the contested decision, that such costs ought to be included in the present instance.

116. The Commission estimated the total insolvency costs at approximately ITL 750 billion, a figure which Alitalia cannot claim to have become aware of for the first time in the contested decision, without having had the opportunity to discuss it. In fact, as early as the report of 21 February 1997 (annexed by Alitalia to the application and considered by the Court as an integral part of the reasons for the 1997 decision), the Commission’s consultants’ conclusion of their analysis of the insolvency costs was that those costs should not exceed ITL 750 billion, rather than the figure of ITL 1 140 billion put forward by Alitalia.

117. It is clear, as is acknowledged by Alitalia itself, that in the Alitalia I judgment the Court did not rule on whether that figure of ITL 750 billion was justified. Nor, however, did it endorse the figure of ITL 1 140 billion proposed by Alitalia in support of its first action (paragraph 138). It cannot therefore be deduced from the Alitalia I judgment that, in order to comply with the grounds of the judgment, the Commission was required to take account of a particular figure for the insolvency costs.

118. Moreover, the assertion in recital 20 in the preamble to the contested decision that Alitalia accepted the figure of ITL 750 billion was removed from the contested decision by way of amendment (see paragraph 22 above).

119. Furthermore, in the Alitalia I judgment (paragraph 150), the Court found that the Commission had made a manifest error of assessment ‘on the basis of the reasons put forward in the [1997] decision’. In other words, the Court did not rule out the possibility that the Commission could rely on more appropriate grounds.

120. The Court also stated that ‘in an action for annulment, it is not for [it] to reassess the internal rate for the investment and to determine whether that rate, on the assumption that the insolvency costs should have been included in its calculation, is still lower than the minimum rate’ (paragraph 151). The Court did not therefore rule out the possibility either that the internal rate might be lower than the minimum rate.

121. In view of the foregoing considerations, the Commission therefore complied with Article 233 EC in the contested decision by including the insolvency costs in the calculation of the internal rate without resuming the review procedure ab initio .

122. Lastly, as regards the account taken of the final adjustments made to the restructuring plan in June 1997, the Court examined, first of all, in the Alitalia I judgment, the chronology of events (paragraphs 158 to 161). It then set out the Commission’s arguments that the final adjustments to the restructuring plan could not have had a decisive impact (paragraph 163). It rejected those submissions on the ground that they related to events which had occurred after the adoption of the 1997 decision (paragraph 164). Finally, the Court stated that, as described by the Commission, the minimum rate was directly proportionate to the risk inherent in the investment and the internal rate, according to the Commission, expressed the underlying internal rate of return. However, the Court added that ‘the Commission itself stated in the [1997] decision that the final improvements to the restructuring plan in June 1997 reduce[d] the risks inherent in the restructuring plan and further increase[d] the profitability of the capital injection’. The Court concluded that ‘[it was] apparent, therefore, that those final amendments [were] of such a kind as to cause the internal rate to rise (increased profitability) and the minimum rate to fall (reduced risks)’ (paragraph 167). Accordingly, the Court considered that the Commission should have reassessed the minimum rate and the internal rate on the basis of the final version of the restructuring plan in order to be able to make an accurate assessment of whether IRI’s investment satisfied the private investor test (paragraph 168). The Court concluded that ‘the Commission made a manifest error of assessment in considering that the adjustments made to the restructuring plan in June 1997, which, on its own admission, reduced the risks inherent in that plan and further increased the profitability of the undertaking, had no impact on the calculation of the minimum rate and the internal rate and, accordingly, on the appraisal of whether IRI’s investment satisfied the private investor test’ (paragraph 169).

123. It follows from the above that, in the Alitalia I judgment, the Court found that the error of assessment had occurred at the last stage of the decision-making process, after the final improvements had been made to the restructuring plan. The Court does not call into question the review procedure, in particular as regards the collection and inspection of the data on those final improvements. Nor does it rule on the minimum rate or the internal rate calculated in the previous reports of the Commission’s consultants. Contrary to the argument put forward by Alitalia, the Court does not give any indication of what those rates should be. On the contrary, it states that it is not for the Court, in an action for annulment, ‘to reassess the minimum rate and the internal rate for the investment or to decide whether a private investor would have made the investment which IRI proposed to make at the time when the [1997] decision was adopted’ (paragraph 170).

124. The obligation imposed on the Commission by the Alitalia I judgment was therefore to take account of the final version of the restructuring plan in calculating the minimum rate and the internal rate. It is therefore necessary to determine whether the Commission complied with that obligation.

125. As regards the fixing of the minimum rate, it is apparent from recital 27 in the preamble to the contested decision that the Commission took account of the amendments to the plan relating to the fact that Alitalia bore the costs of the early retirement programme, that it took faster action to cut expenditure on personnel by transferring Alitalia personnel to Alitalia Team more quickly than anticipated, that it reduced the amount of the capital injection from ITL 2 800 billion to ITL 2 750 billion and that Alitalia’s shares in the Hungarian company, Malév, and in six regional Italian airports were released.

126. The Commission also provided figures demonstrating the impact of those amendments in recital 27 in the preamble to the contested decision.

127. However, in recitals 25 to 28 in the preamble to the contested decision, the Commission set out a number of factors which, in its view, increased the risks of the operation and thus neutralised the effects of the adjustments in question.

128. As regards the fixing of the internal rate, Alitalia suggests that the rate of 26.1% which appears in recital 23 in the preamble to the contested decision is simply a repetition of the rate already fixed previously by the Commission. The Commission did not therefore, in its view, reassess that rate in the light of the final version of the restructuring plan, as it was, however, required to do pursuant to the Alitalia I judgment.

129. In the 1997 decision, the Commission fixed the internal rate as being close to 20% (point VII, paragraph 8). The rate of 26.1% is therefore not a repetition of the rate taken into account in the first procedure which concluded with the Alitalia I judgment.

130. It is apparent from the Alitalia I judgment that the Commission had asserted ‘in its rejoinder that that rate, recalculated on the basis of the final version of the plan, [was] no more than 26.1%, even including the insolvency costs’ (paragraph 163). A table was annexed to that document. The Court did not take that percentage into account for the simple reason that, according to the case-law, ‘[i]n order to assess the legality of the contested decision, the Court takes into consideration only the matters which the Commission had at its disposal when it adopted the contested decision’ and that ‘[a]ny argument of the Commission relating to events which occurred after the adoption of the [1997] decision [was] therefore [to] be disregarded’ (paragraph 164).

131. It follows that, at the stage of the rejoinder in Case T‑296/97, the Commission had already recalculated that rate on the basis of the final version of the plan, fixing it at 26.1%, but that the Court, without examining it, had rejected the possibility of taking it into account, since it did not appear in the 1997 decision. It cannot be deduced from the Alitalia I judgment that that rate of 26.1% did not take account of the final version of the restructuring plan.

132. There was therefore nothing to prevent the Commission from referring in the present proceedings to the table which it had drawn up for the purpose of Case T‑296/97 and which was annexed by Alitalia to the application in these proceedings. However, the Commission considered it appropriate to approach the consultants whose assistance it had sought before the adoption of the 1997 decision to ask them, in particular, ‘to calculate either the internal rate of return on the capital injection or the appropriate minimum rate taking account of the terms of the [Alitalia] judgment [I]’ (recital 10 in the preamble to the contested decision).

133. In their report of 1 June 2001, annexed to the defence, the Commission’s consultants state that the cash flow forecasts annexed to the rejoinder in Case T‑296/97 correspond to those provided by Alitalia in the final version of the June 1997 plan, with the exception of the final value of the company at the end of the year 2000, for reasons linked to the company’s growth rate after that year and the different value attributed to the ‘standard’ cash flow for 2000. Moreover, the negative cash flow resulting from underwriting the increases in capital anticipated for June 1997 (ITL 1 000 billion), March 1998 (ITL 500 billion) and March 1999 (ITL 250 billion) were updated using the risk-free rate. In addition, two possibilities were envisaged with regard to the amount of IRI’s contribution, namely 79% or 86%.

134. The Commission also explains, in recitals 19 to 23 in the preamble to the contested decision, how it arrived at the internal rate of 25.2% or 26.1%, according to the taxation applicable. It explains, inter alia, in recital 22, the method used for determining the value of Alitalia at the end of 2000.

135. It follows that neither the Commission’s consultants nor the Commission itself were content simply to reproduce their earlier calculations.

136. Moreover, it is apparent from the report of 1 June 2001 that the Commission’s consultants took account of the reduction in the increase in capital, the release of other shares, the acceleration of the restructuring of Alitalia and the fact that it bore the costs of the early retirement programme. They provided figures illustrating the effects of those new circumstances on the principal economic data of the plan.

137. Furthermore, the Commission could not take account of information that was not available to it when the 1997 decision was adopted (see, to that effect, Case C‑482/99 France v Commission [2002] ECR I‑4397, paragraph 71). It was therefore required not to take account of the period during which the plan was implemented, between the 1997 decision and the contested decision.

138. In conclusion, the Commission also complied with Article 233 EC as regards the abovementioned ground on which the 1997 decision was annulled in the Alitalia I judgment.

139. In accordance with the case‑law cited in paragraphs 98 to 101 and 137 above, since the situation to be assessed was the same as that assessed in the 1997 decision and the Court did not criticise the review procedure, it was possible for the Commission to resume that procedure at the stage at which the Court found that a failure to state adequate reasons and errors of assessment had occurred. In order for it to comply with Article 233 EC and the operative part and grounds of the Alitalia I judgment, it was sufficient for the Commission to state adequate reasons for its choice of the same minimum rate as that it had applied in the Iberia decision, to include the insolvency costs in the calculation of internal rate and to take account of the final version of the restructuring plan in calculating the minimum rate and the internal rate.

140. None of the arguments put forward by Alitalia calls that conclusion into question.

141. In fact, as regards, first of all, the argument that the Commission should have reopened the formal investigation procedure since it did not have available to it full uncontested information, the Commission opened the formal investigation procedure under Article 88(2) EC on 9 October 1996 and that procedure was concluded with the 1997 decision.

142. Since the 1997 decision was annulled by the Court of First Instance, the procedure for replacing such a measure could therefore be resumed at the very point at which the illegality had occurred. Following the Court’s annulment of the 1997 decision, the Commission was not required to recommence the procedure by going back further than the precise point at which that illegality had occurred (see paragraph 99 above). In the present case, the illegalities censured by the Court do not go back as far as the opening of the procedure.

143. Next, with regard to the claim that it was necessary, after the amendments made to the restructuring plan by the 26 June 1997 version, to publish a new notice in the Official Journal and to reopen the formal investigation procedure in order to consult once more the financial investors and experts, there is no provision in Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [88 EC] (OJ 1999 L 83, p. 1) requiring a procedure to be reopened where adjustments are made to the initial plan in the course of the formal investigation, even though such adjustments are envisaged in Article 7(2) and (3) of Regulation No 659/1999.

144. Moreover, it is clear from the Alitalia I judgment, in particular paragraphs 123, 133, 143 and 163 to 167, that the Court criticised the Commission for failing to give adequate reasons for or to take account of information available to it of which it was aware. Since it had available to it the information necessary for the fresh analysis required by the Court and, in particular, the final improvements made to the restructuring plan in June 1997 (paragraph 167), the Commission was not under an obligation to start the investigation of the case afresh or even to supplement it by consulting once more the investors and experts or by resorting to new technical expertise.

145. Contrary to what Alitalia submits, it is apparent from the document produced by the Commission at the request of the Court setting out the tasks entrusted to its consultants after the annulment of the 1997 decision that the Commission did not instruct them to gather new information but to supplement and update their earlier report by including the insolvency costs in the calculation of the internal rate and taking account of any effects of the adjustments to the plan in the final version of June 1997 in calculating the internal rate and the minimum rate. The description of the tasks entrusted to the Commission’s consultants also specifies that the consultants had already carried out the bulk of the work when they contributed to the preparation of the rejoinder lodged by the Commission on 13 July 1999 in Case T-296/97.

146. Moreover, it would in any event be contrary to case-law to oblige the Commission to reopen the procedure in order to seek items of information relating to the period after the 1997 decision had been adopted. In fact, in order to examine whether or not the State has adopted the conduct of a prudent investor operating in a market economy, it is necessary to place oneself in the context of the period during which the financial support measures were taken in order to assess the economic rationality of the State’s conduct, and thus to refrain from any assessment based on a later situation (see paragraph 137 above).

147. It follows that the first part of the first plea, alleging procedural defects, and the third plea, alleging that the contested decision did not comply with the Alitalia I judgment, are unfounded.

C – The plea alleging infringement of the obligation to adopt a decision within a period of two months, laid down in Article 4(5) of Regulation No 659/1999

1. Arguments of the parties

148. In the second part of its first plea, Alitalia submits that, after the annulment of its earlier decision in the Alitalia I judgment, the Commission had two months within which to adopt a decision, pursuant to Article 4(5) of Regulation No 659/1999. In its view, the Commission did not comply with that obligation.

149. Alitalia adds that it would undermine the principle of legal certainty if an institution were permitted freely to choose the period for complying with a judgment annulling a decision adopted concerning State aid. That applies a fortiori since the Commission did not avail itself of the right to lodge an appeal against the Alitalia I judgment before the Court of Justice and therefore that judgment had become final, so that Alitalia was able to regard its legal situation as being definitively clarified.

150. The Commission’s failure to take any steps between the notification of the Alitalia I judgment and the adoption of the contested decision also entailed an implicit decision that the disputed aid was compatible with the common market under Article 4(6) of Regulation No 659/1999.

151. In its reply, Alitalia adds that, even if the Commission were not under an obligation to reopen the formal procedure for investigating the contested operation and Article 7(6) of Regulation No 659/1999 therefore applied, the overall length of the procedure was in any event excessive. It in fact took the Commission almost 19 months from the date of notification of the plan to grant aid in order to reach a final decision in the present case. A little more than seven months also elapsed between the delivery of the Alitalia I judgment and the adoption of the contested decision. Such a period is unreasonable, since the Commission did no more than reassess the results of the investigation procedure and took no active steps during the first four months.

152. For the Commission, the premiss on which the second part of the first plea is based is clearly incorrect. The Alitalia I judgment did not take the procedure back to the preliminary stage but to the conclusion of the formal investigation procedure. It follows that the Commission was not bound by the mandatory two-month time-limit laid down in Article 4(5) of Regulation No 659/1999 but to the non-mandatory time-limit of 18 months imposed in Article 7(6). In the present case, the total period of just over 16 months which was required for the adoption of the contested decision is therefore less than that mandatory period.

153. Moreover, the case-law recognises that an institution whose measure has been annulled should be allowed a reasonable period within which to give effect to the annulment judgment. The period available to the Commission in the present case cannot therefore be deduced automatically from Article 7(6) of Regulation No 659/1999. On the contrary, it is necessary to take account of the nature and the extent of the measures necessary for the adoption of a new decision.

154. According to the Commission, Alitalia’s argument in the reply alleging that a ‘reasonable period’ had elapsed is a new plea. Since it was raised belatedly, it is inadmissible and, what is more, unfounded.

2. Findings of the Court

155. The obligation of a Community institution to give effect to an annulment judgment delivered by the Community judicature derives from Article 233 EC. It has been recognised by the Court of Justice that compliance calls for the adoption of a number of administrative measures and is not normally possible immediately: the institution is allowed a reasonable period within which to comply with a judgment annulling one of its decisions. The question whether or not the period was reasonable depends on the nature of the measures to be taken and the attendant circumstances (see Case T‑73/95 Oliveira v Commission [1997] ECR II‑381, paragraph 41 and the case‑law cited).

156. In the present case, a little over seven months elapsed between the delivery of the Alitalia I judgment and the adoption of the contested decision. That period cannot be regarded as excessive for the purpose of giving practical effect to the Alitalia I judgment, in particular by making, on the basis of the available information, a fresh application of the private investor operating on market principles test – which requires in-depth financial analysis.

157. Moreover, for the purpose of monitoring new aid which the Member States intend to grant, Article 88 EC distinguishes between the preliminary investigation stage and the formal investigation procedure. The preliminary investigation stage provided for in Article 88(3) EC is intended merely to allow the Commission a sufficient period of time for reflection and investigation so that it can form a prima facie opinion on the draft aid plans notified to it, thus enabling it to conclude that the aid plans do not constitute aid, that they are compatible with the common market or that the existing doubts as to their compatibility make it necessary for an in-depth investigation to be carried out (Case 120/73 Lorenz [1973] ECR 1471, paragraph 3, and Case C‑204/97 Portugal v Commission [2001] ECR I‑3175, paragraph 34). Having regard to the interest of Member States in being informed of the position quickly, the preliminary investigation stage must, in principle, be regarded as an urgent matter and is accordingly subject to a mandatory two-month period that runs from the receipt by the Commission of complete notification ( Lorenz , paragraph 4, and Case C‑334/99 Germany v Commission [2003] ECR I‑1139, paragraphs 49 and 50).

158. The formal investigation procedure provided for in the first subparagraph of Article 88(2) EC is essential where the Commission is unable to satisfy itself after the preliminary investigation stage that a plan does not constitute aid or that, despite constituting aid, it is compatible with the common market. The aim of the procedure is therefore to enable the Commission to be fully informed of all the facts of the case by carrying out all the requisite consultations, as it is under a duty to do, before reaching its final decision, as well as to protect the rights of potentially interested third parties by allowing them to make their views known (Case T‑171/02 Regione autonoma della Sardegna v Commission [2005] ECR II‑2123, paragraph 32).

159. In the present case, the Court considered that, after the annulment of the 1997 decision, the Commission was not required to repeat the whole procedure from the beginning by going back beyond the precise point at which the illegality sanctioned by the Court had occurred, that is, the final stage of the formal investigation procedure (see paragraphs 97 to 144 above).

160. Since the entry into force of Regulation No 659/1999 on 16 April 1999, the formal investigation procedure has been subject to an indicative period of 18 months, which runs from the date on which the procedure was initiated. As the period of 18 months provided for in Article 7(6) of Regulation No 659/1999 is indicative only, it is necessary to consider whether, in the present case, it is apparent from the progress of the formal investigation procedure that the Commission failed to take a reasonable amount of time or acted too slowly (see, to that effect, Regione autonoma della Saredgna v Commission , paragraphs 56 and 57).

161. The Commission decided to initiate the procedure laid down in Article 88(2) EC on 9 October 1996 and adopted the 1997 decision on 15 July 1997. After the Court annulled that decision in the Alitalia I judgment, delivered on 12 December 2000, the Commission adopted the contested decision on 18 July 2001. It follows that the formal investigation had taken a little over nine months before the annulment judgment and was resumed a little over seven months after that judgment was delivered. Therefore, the overall duration of the formal investigation did not exceed the period laid down in Regulation No 659/1999.

162. Moreover, Alitalia cannot claim that the principle of the protection of legitimate expectations was infringed on the sole basis that the Alitalia I judgment was not appealed. In fact, that judgment did not exclude the possibility that the contested decision could be remedied. Furthermore, the period available to the Commission to give practical effect to that judgment was longer than the two-month period within which it would have had to lodge its appeal against the judgment.

163. In conclusion, the second part of the first plea alleging procedural defects must also be rejected.

D – The plea alleging infringement of the rights of defence

1. Arguments of the parties

164. Alitalia complains that the contested decision is unlawful in so far as the Commission seriously infringed its rights of defence. The Court of Justice has placed express emphasis on the importance of the rights of defence in matters of State aid and acknowledged, in particular, that the recipients of State aid may rely on the protection of those rights.

165. Alitalia submits that, in any event, the recipient of aid must have the right to submit comments.

166. However, in spite of requests made to that end, it was not given the opportunity to express its opinion either on whether it was appropriate to adopt a new decision after the annulment of the 1997 decision or on the content of such a decision. There was no exchange of arguments with the Italian authorities or Alitalia on the report of the Commission’s consultants. However, respect for all procedural safeguards was all the more necessary since the Commission was not obliged to resume the position which it had adopted in the 1997 decision.

167. The Commission deduces from the fact that the administrative procedure in matters of State aid is initiated only in relation to the Member State concerned that only Member States can rely on actual rights of defence.

168. In any event, Alitalia’s right to submit comments had been guaranteed since 1996 by the publication of the decision to initiate the formal investigation procedure. Following the publication of that decision, Alitalia did in fact state its point of view. Its action for the annulment of the 1997 decision also enabled it to defend its arguments. Since the purpose of the investigation procedure remained the same after the Alitalia I judgment and the facts on which it relies in the contested decision are exactly the same as those relied on in the 1997 decision, the Commission submits that it was not necessary to invite Alitalia to submit its comments once again.

2. Findings of the Court

169. According to settled case-law, respect for the rights of defence is, in all proceedings initiated against a person which are liable to culminate in a measure adversely affecting that person, a fundamental principle of Community law which must be guaranteed even in the absence of specific rules. That principle requires that the person concerned be afforded the opportunity during the administrative procedure to make known in an effective manner his views on the truth and relevance of the facts, charges and circumstances relied on by the Commission (see Joined Cases T‑228/99 and T‑233/99 Westdeutsche Landesbank Girozentrale and Land Nordrhein-Westfalen v Commission [2003] ECR II‑435, paragraph 121 and the case‑law cited).

170. The administrative procedure regarding aid is initiated only against the Member State concerned. Undertakings that receive aid and the local authorities within that State which grant the aid are considered, in the same way as competitors of the recipients of the aid, only to be ‘interested parties’ in this procedure (see Westdeutsche Landesbank Girozentrale and Land Nordrhein-Westfalen v Commission , paragraph 122 and the case-law cited).

171. Moreover, it is settled case-law that, in the context of an examination under Article 88(2) EC, the Commission is required to give notice to the parties concerned to submit their comments. With regard to that duty, the Court of Justice has ruled that the publication of a notice in the Official Journal is an appropriate means of notifying the persons concerned that the procedure is to be initiated, while also pointing out that the sole aim of this communication is to obtain from persons concerned all information required for the guidance of the Commission with regard to its future action (see Westdeutsche Landesbank Girozentrale and Land Nordrhein-Westfalen v Commission , paragraphs 123 and 124 and the case-law cited).

172. This case-law confers on the parties concerned the role of information sources for the Commission in the administrative procedure instituted under Article 88(2) EC. It follows that, far from enjoying the same rights of defence as those which individuals against whom a procedure has been instituted are recognised as having, the parties concerned have only the right to be involved in the administrative procedure to the extent appropriate in the light of the circumstances of the case (see Westdeutsche Landesbank Girozentrale and Land Nordrhein-Westfalen v Commission , paragraph 125 and the case‑law cited).

173. Since Alitalia does not enjoy the same rights of defence as those which individuals against whom a procedure has been instituted are recognised as having, it is necessary to determine whether, on the basis of such case‑law, it was involved in the administrative procedure to the extent appropriate in the light of the circumstances of the case.

174. It is apparent from the Court’s findings in the Alitalia I judgment that the Italian authorities and Alitalia were closely involved in the investigation of the disputed aid before the adoption of the 1997 decision, which was replaced by the contested decision after the former had been annulled. Moreover, the Commission was required to base its new analysis solely on information which was available to it at that time (see paragraph 137 above) – information in respect of which both the Italian Republic and Alitalia had already defined their position, so that it was unnecessary to consult them afresh. Finally, with the publication of a notice in the Official Journal of 16 November 1996 (OJ 1996 C 346, p. 13), the third parties concerned were ensured the right to submit their comments and there is no provision in Regulation No 659/1999 requiring that that opportunity be made available to them again where the original plan has been amended during the investigation procedure.

175. With regard in particular to the argument concerning the report of the Commission’s consultants of 1 June 2001, even though it must be concluded in the circumstances of the case that some form of obligation arose to consult the Italian authorities on that report, it cannot be inferred from the Westdeutsche Landesbank Girozentrale and Land Nordrhein-Westfalen v Commission case‑law that the same obligations should be extended to the third parties concerned. The latters’ role is essentially that of a source of information and they do not enjoy the same rights of defence as those which individuals against whom a procedure has been instituted are recognised as having (see paragraph 172 above).

176. In any event, as is apparent from paragraph 145 above, since the very limited task entrusted to its consultants by the Commission was simply to update their previous report by taking account of the grounds of the Alitalia I judgment, its purpose was ‘only [to provide] the Commission with technical assistance’ (recital 10 in the preamble to the contested decision) in its analysis and assessment of the information available to it, as could have been provided by a Commission department. In the parts of the contested decision devoted to the legal assessment of the contested capital injection, there is no express reference to the report of 1 June 2001. That report cannot therefore be regarded as a vital document as regards the grounds of the contested decision.

177. On the basis of all the above considerations, the second plea must be rejected.

E – The plea alleging infringement and misapplication of Articles 87 EC and 88 EC

178. Alitalia submits that the errors made by the Commission in the contested decision relate, for the most part, essentially to the correction of the errors identified by the Court in the Alitalia I judgment. After making a number of preliminary observations on the private investor test, it disputes the determination of the minimum rate and that of the internal rate.

1. Determination of the minimum rate

179. Alitalia challenges the application in its case of the minimum rate used in the Iberia decision, the failure to take account of the final version of the restructuring plan and the use of incorrect premisses.

a) The application of the minimum rate used in the Iberia decision to Alitalia

Arguments of the parties

180. Alitalia complains that the Commission failed to carry out a detailed comparison of its situation with that of Iberia, to which the Commission refers in order to justify the minimum rate of 30%. It contends that the arguments set out by the Commission in recitals 30 and 31 in the preamble to the contested decision had already been rejected by the Court in the Alitalia I judgment.

181. Alitalia also maintains that those arguments are incorrect. Alitalia and Iberia are not companies of comparable scale. The capital injections are substantially the same in both cases only because the Commission failed to take account of a recapitalisation which the Spanish company benefited from. It is manifestly incorrect to state that the greater the increase in capital, the higher the risk. To state that the two companies operate in a market which is not at the geographical centre of Europe is to disregard the geographical location of the north and centre of Italy. Iberia did not secure real agreements with the unions to improve the level of unit costs but simply enjoyed a limited short-term agreement, whereas Alitalia already had an innovative long‑term agreement which also provided for a share‑ownership scheme for employees to ensure wider employee participation. The liberalisation of the Spanish civil aviation market was a threat to Iberia, in so far as the ground-handling services it provided to other companies was liberalised, whereas the liberalisation of the Italian civil aviation market gave Alitalia the opportunity to develop a self-handling project in that sector. The projects for Malpensa airport (Italy) were not the central components of the economic and financial projections of the contested plan. Alitalia also fails to understand in what way the fact that it did not enjoy a privileged position on certain routes could constitute a risk factor liable to have an effect on the minimum rate. The social situation of Iberia, which experienced continuous strikes, is different from that of Alitalia. The effects of the liberalisation of the Italian civil aviation market were properly taken into account in the contested plan without undue optimism. By contrast, it would be incorrect to claim that it was already possible fully to assess the effects of the liberalisation of the Spanish market on Iberia’s market share when the Commission took the Iberia decision.

182. Finally, the reference to Continental Airlines, Air Partners and Air Canada in recital 32 in the preamble to the contested decision is totally irrelevant.

183. For its part, the Commission contends that Iberia and Alitalia are comparable to the extent that they are both medium-sized companies and have a similar value. Next, Alitalia suffered above all from the disadvantage of not having a prime market, comparable to that represented by Latin America for Iberia. Moreover, in terms of labour relations, Alitalia’s position is more sensitive than that of Iberia. In addition, in the case of Alitalia, it is necessary to take account of the uncertainty connected with the liberalisation of the Italian market that was imminent in 1997.

184. Lastly, the Commission disputes the fallacious use which Alitalia makes of the case involving investment by Air Canada and Air Partners in Continental Airlines.

Findings of the Court

185. First of all, the Commission’s assessment of whether an investment satisfies the private investor test is a complex economic matter. In adopting a measure entailing such a complex economic assessment, the Commission enjoys a wide discretion and any judicial review of such a measure, even though it is generally thorough as far as the question of whether a measure falls within the scope of Article 87(1) EC is concerned, is confined to establishing that the rules of procedure and the rules relating to the duty to give reasons have been complied with, to verifying the accuracy of the facts relied on in making the contested decision and that there has been no manifest error in the assessment of those facts or misuse of powers. In particular, it is not for the Court to substitute its economic assessment for that made by the institution which adopted the decision (see Alitalia I judgment, paragraph 105 and the case‑law c