The European court of first instance declares Air France state aid decision illegal

THE EUROPEAN COURT OF FIRST INSTANCE DECLARES AIR FRANCE STATE AID DECISION ILLEGAL The European Court of First Instance pronounced a judgment today - in which it declared the European Commission decision from 1994, where an injection of state aid of 20 Bn, FF, was approved, as invalid. SAS, togheter with i.a. British Airways and KLM filed a complaint with the court a few months after the commision decision in 1994, seriously questioning both the reasoning behind the decision, the totally unreasonable amount involved as well as the insufficient conditions attached to the approval. The court has found that the arguments of i.a. SAS where valid and have accordingly decided against the Commission. "This is of cours a victory for justice, as well as for common sence", says Hans Ollongren, Director European and Public Affairs of SAS. "The SAS complaint was not directed at Air France as a company, but rather against an approval system which allows for uncontrolled state aid, heavily influenced by political pressure and considerations, which ultimately would disort competition". "SAS have undertaken significant work to restructure its activities during recent years and this has been achieved without artificial means. Furthermore, the functioning of the internal market must be based on the principle of equal rules for businesses - and this was the basis for our opposition to the orginal decision." SAS has been lobbying against state-aid for several years. European competitors have been granted in total 12,5 billion US dollars in aid by their respective governments since 1991. This includes aid to Sabena, Iberia, Aer Lingus, Air France and Alitalia. The immediate consequence of the decision will not be that Air France will be forced to pay back the aid already granted by the French Government, but rather that the Commision has to make a new and more thorough analysis ocf the case, and this work may ultimately lead to a dew decision with different conditions. Further information may be obtained from Hans Ollongren - Director European & Public Affairs +32 2 775 97 69 Ulf Lundmark - Director Corporate Advisory +46 8 797 15 88 ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2003/07/29/20030729BIT00700/wkr0001.DOC http://www.waymaker.net/bitonline/2003/07/29/20030729BIT00700/wkr0002.pdf