The European Commission is to investigate a €200 million bailout by the Polish government for airline LOT Polish Airlines earlier this year.
The in-depth probe will examine the restructuring aid given to state-owned LOT in June 2013 to see if it applies to the EU’s rules on government funding.
The EC said in a statement: “The commission has doubts whether LOT's restructuring plan complies with the requirements of the 2004 EU Rescue and Restructuring Guidelines.
“In particular, the commission is concerned that the forecasts on long-term viability may not be realistic and that the proposed capacity reduction may not be adequate to compensate for the distortions of competition.
“The commission also has doubts whether LOT's own contribution to the restructuring cost is sufficient.”
As part of the investigation, other airlines will have the opportunity to “comment on the measures under scrutiny”.
The EC could force LOT to give back all or some of the money if the commission finds that the €200 million in state aid is illegal.
LOT has made losses for each of last five years and has faced severe cashflow problems leading to the restructuring payment from the Polish government.
Sebastian Mikosz, the airline’s chief executive, said: “It is standard for the commission to launch such procedures when it comes to entities, including airlines, that go for public aid for restructuring.”
lot.com