State aid: Commission launches investigation into state loan granted to Czech airlines
24-Feb-2010 The European Commission has today decided to launch an investigation into a loan granted to ČSA – Czech airlines a. s. by the State-owned entity Osinek a. s. to determine if these actions are compatible with the EU State aid rules.
At this stage, the Commission cannot exclude that the loan and its subsequent de-collateralisation - which the airline will use to finance costs linked to the operation of the company - constitutes aid that is incompatible with the internal market. The investigation will give all interested parties the opportunity to submit their comments.
On the basis of a loan agreement which was concluded between Osinek and ČSA-Czech airlines on 30 April 2009, a loan amounting to CZK 2.5 billion (€ 94 million) was granted by Osinek. Subsequently, on 26 October 2009, the Czech government decided to free up the assets which secured the loan provided by Osinek in order to allow ČSA-Czech airlines to use this collateral to secure commercial loans and continue in business. Therefore, the Osinek loan is no longer secured by assets.
The Commission considers, at this stage, that these measures in favour of ČSA-Czech airlines could constitute State aid that unfairly harms competitors.
By opening this procedure the Commission will be able to examine in detail the exact nature and conditions of these measures in favour of ČSA-Czech airlines so as to determine whether they constitute State aid, and if so, whether such aid is compatible with the internal market. The Commission will particularly assess whether a private investor would have acted in the same way as the Czech Government.
Launching this in-depth investigation will allow all the interested parties to express their points of view. It does not prejudge the final decision of the Commission.