State aid: Commission finds sale of LOT Polish Airlines’ subsidiaries did not involve state aid

Brussels, 22-11-2012 — /europawire.eu/ — The European Commission has concluded that the sale of LOT Services, LOT Catering and LOT Airport Maintenance Services, subsidiaries of LOT Polish Airlines, was carried out on market terms and did therefore not involve state aid in the meaning of EU rules.

LOT has been under restructuring since 2009. The company is trying to improve its financial situation by selling subsidiaries and focusing on its main business activity – the transport of passengers and cargo.

The Commission’s investigation related to the sale of LOT Services – which provides ground handling services -, LOT Catering and LOT Aircraft Maintenance Services. These companies were acquired by State-owned entities. No open and transparent tender was organised. The Commission therefore had to make sure that these sales did not contain hidden subsidies in favour of LOT.

The Commission has examined the conditions of the transactions, in particular the purchase price as well as the pre-transaction valuations of the companies concerned. On this basis, the Commission concluded that the sales were carried out under terms that a private player operating under market conditions would have accepted (the market economy investor principle – MEIP). The sales therefore did not involve any state aid.

Background

Public interventions in companies that carry out economic activities can be considered free of state aid in the meaning of the EU rules when they are made on terms that a private player operating under market conditions would have accepted (the market economy investor principle – MEIP).

If the MEIP is not respected, the public intervention constitutes state aid because it procured an economic advantage to the beneficiary that its competitors did not have. The Commission will then proceed to assess, whether such aid can be found compatible with the common EU rules that allow certain categories of aid.

The non-confidential version of the decision will be made available under the case number SA.33337 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.