Global law firm White & Case LLP has secured a significant victory for České aerolinie, a.s. (“Czech Airlines”). The European Commission (“the Commission”) has determined that CZK2.5 billion in restructuring aid, originally provided to Czech Airlines in April 2009, is in line with European Union (EU) state aid rules.
Following an in-depth review, the Commission noted that the airline’s restructuring plans, consisting of capacity reduction, efficient cost and revenues management and the sale of assets, should ensure the company’s viability.
“Under EU state aid rules, the intervention of public authorities in private company matters requires careful consideration. There cannot be any advantage that unfairly alters the competitive landscape. The aviation industry is extremely competitive; a careful balance must be maintained while the sector is under considerable strain in the current economic environment. Approvals of this kind are difficult to achieve, so this is a major success,” said White & Case partner Kai Struckmann.
By contrast, in January this year, the Commission ruled that Hungarian airline Malev should return the equivalent of US$390 million in “unlawful aid” paid by its government from 2007 to 2010, saying it would have struggled to raise cash from a private investor. The airline ceased flying in February.
The White & Case team was led by partners Mark Powell, Kai Struckmann (Brussels) and Ivo Janda (Prague), with the support of counsel Christoph Arhold (Berlin) and associates Genevra Forwood (Brussels) and Magda Olysarova (Prague).
