Ryanair lawsuit bad news for Olympic-Greece
Fri Nov 30, 2007 4:04 PM GMT
ATHENS, Nov 30 (Reuters) – Ryanair’s (RYA.I: Quote, Profile , Research) lawsuit against the European Commission over its failure to make Olympic Airlines [OLY.UL] pay back state aid will discourage any investors interested in the airline, Greece said on Friday.
Greece has been trying to privatise the airline, renamed from Olympic Airways, but repeated calls for interest from investors have yielded no results for the debt-ridden carrier.
Budget airline Ryanair said last week it was suing the European Commission for failing to act on the Irish airline’s complaint the Greek government provided illegal state aid to Olympic Airlines.
The Commission has also ordered Greece to retrieve hundreds of millions in state aid dating back to the 1990s, something which it has yet to do.
“Ryanair’s lawsuit … and the demand to open up dossiers on ‘new illegal state subsidies’ are worsening the situation of Olympic,” Transport Minister Kostis Hatzidakis said in a statement following a meeting with European Transport Commissioner Jacques Barrot in Brussels.
“Anyway, as long as legal problems with Brussels remain unsolved, any credible investor is discouraged,” he said in the statement released in Athens.
The Commission first ruled in 1996 that Greece was in breach of EU state aid rules.
Olympic Airways was split into two units in 2003; a debt-heavy services company and a debt-free carrier, Olympic Airlines. Brussels still regards it as one company.
Olympic Airlines was thrown a lifeline last December when Greece’s Supreme Court ordered the state to pay the carrier 563 million euros for unpaid services it had rendered in the past.
“Despite these problems the battle (to rescue Olympic) will continue,” Hatzidakis said. “Taxpayers should know we respect their money and are seeking a … viable solution.” (Writing by Karolos Grohmann; Editing by Paul Bolding)