Court of Justice of the European Communities (including Court of First Instance Decisions)

- economic reality required that account should be taken of the economic situation and prospects of the entire Air France group;

- it had to examine the effects which the aid would have on the competitive situation of Air France on its international and domestic routes competing with other European carriers.

from 23 interested parties, among them the Kingdom of Denmark, the United Kingdom of Great Britain and Northern Ireland, the Kingdom of Sweden, the Kingdom of Norway, the Association des Compagnies Aériennes de la Communauté Européenne (Association of Airline Companies of the European Community, hereinafter 'ACE') and a large number of European air companies, including the applicants.

- the aid would benefit not only Air France but also the entire group;

- the aid would lead to overcapitalisation of the Air France group;

- the purchase of 17 new aircraft at a cost of FF 11.5 billion would be unacceptable;

- the compatibility of the aid with the common market ought not to be assessed solely from the standpoint of the development of its beneficiary;

- in the event of authorisation of the aid, a massive reduction in Air France's capacity ought to be imposed.

The contested decision

domestic market and meeting competition on international routes. The Air France group had begun a policy of modernisation and expansion of its fleet financed through borrowings, the financial charges on which had negatively affected the group's final result, leading to an initial loss of FF 717.2 million in 1990. To counter this situation, the group had adopted a number of restructuring plans, none of which, however, was successful.

number of aircraft orders; further postponement would take the average fleet age beyond 10 years, which was too high for an airline aiming at regaining its competitive strength. So far as the sale of assets was concerned, the Commission noted that there was only a limited number of assets, such as Méridien, Sabena and Air Inter, whose sale could bring in significant amounts of money. Sabena and Air Inter were two important core assets for Air France's aviation business. The sale of the remaining assets was already part of the Plan and would not in any event lead to a significant reduction in the amount of the aid.

authorise Community carriers to exercise traffic rights on the routes from Paris (Orly) to Toulouse and Marseille by 27 October 1994 at the latest.

Procedure before the Court of First Instance

Forms of order sought

- annul the contested decision; and

- order the Commission to pay the costs.

The applicant in Case T-394/94 further requests the Court to prescribe measures of organisation of procedure and measures of inquiry, in accordance with Articles

64 and 65 of the Rules of Procedure, and order production of all the relevant files and documents available to the Commission.

- annul the contested decision; and

- order the Commission to pay the costs, including those of the United Kingdom.

- annul the contested decision.

- annul the contested decision; and

- order the Commission to pay the costs of their intervention in so far as such a decision lies within the discretion of the Court.

- dismiss the applications;

- order the applicants to pay the costs; and

- order the Kingdom of Denmark, the United Kingdom, the Kingdom of Sweden, the Kingdom of Norway and the Maersk companies to contribute to the Commission's costs.

- dismiss the applications.

- dismiss the applications; and

- order the applicants to pay the costs, including those incurred by Air France.

Substance

I - The pleas alleging irregularities in the conduct of the administrative procedure

Summary of the parties' arguments

- did not explain how the sum of FF 20 billion was calculated;

- failed to indicate, in regard to the acquisition of 17 new aircraft, what types of aircraft would be acquired or what types of aircraft the fleet would comprise;

- did not provide a copy of the restructuring plan;

- predicted a 30% or 33.3% increase in productivity without explaining the basis of such calculation;

- did not provide details of the cost of the proposed voluntary redundancies;

- failed to provide details of Air France's assets and to explain the breakdown between core and non-core assets;

- did not give any valuation of the Méridien hotel chain;

- did not give details of the value of Air France's shareholding in Air Inter, Sabena or others, or explain why these were not considered to be non-core assets;

- did not provide details of Air France's proposed route network so as to enable its possible effects on competition to be calculated;

- did not give details of proposed 'new products' referred to by Air France, so as to enable an assessment of their effect on competition;

- did not have Air France's annual accounts at the time when the contested decision was taken;

- failed to explain why it did not insist on the disclosure of essential information necessary for the adoption of a reasoned decision on the compatibility of the aid with the common market;

- did not take subsidiaries - in particular Air Inter - into account, as the restructuring plan concentrated solely on Air France; and

- did not explain how the proposals for Air France to continue expansion plans could be reconciled with the aims of the Treaty, particularly in the light of the failure of the two earlier capital injections of FF 5.8 billion.

submitted by Air France, on the ground that it would otherwise not have sufficient information to comment meaningfully on the planned aid.

the contested decision was adopted (27 July 1994) was 37 working days and thus much shorter than the average period in similar cases.

94/698/EC of 6 July 1994 concerning increase in capital, credit guarantees and tax exemption in favour of TAP (OJ 1994 L 279, p. 29) ('the TAP decision')). Moreover, Article 10(3) of Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings (OJ 1989 L 395, p. 1) ('Regulation No 4069/89'), according to which a decision declaring a notified concentration to be compatible with the common market should be made within four months, confirms that such a period is reasonable.

Findings of the Court

General aspects

The communication of 3 June 1994

- Air France's economic and financial situation prior to the drafting of the aid plan, in particular the previous restructuring plans and capital injections and its accumulated losses;

- the 'particular ... topics' on which the new restructuring plan focuses;

- the projected aid amount of FF 20 billion; and

- the main doubts expressed by the Commission at that stage of the procedure concerning in particular the productivity gains of Air France, the structure of the Air France group, the competitive position of Air France and the possibility of its being overcapitalised.

The Court takes the view that such information was sufficient to enable the parties concerned to present their arguments effectively before the Commission.

stage prior to its approval by the Commission and to the start of its implementation - contained such information, and it was clearly not a matter for competitors to evaluate, and compare with their own management measures, each of the restructuring measures envisaged by Air France. Were the position otherwise, competitors would be able to interfere in the internal restructuring of Air France and to attempt to 'dictate' the measures which they might see fit for that company, after having obtained valuable information on their competitor. Such an analysis is not gainsaid by the fact that other interested parties, such as ACE (p. 27, final paragraph, of its observations), have apparently been able to obtain this restructuring plan. That fact cannot lead the Commission to infringe Article 214 of the Treaty.

The time taken for consideration of the case

a breach of specific rules governing procedure, the duty to provide reasons or the internal legality of the contested decision. Consequently, without its being necessary to express a view on the relevance of the Commission's decision-making practice in regard to concentrations, this contention must be rejected.

The need for external experts

The translation error

The participation of other Member States

Conclusion

II - The pleas alleging errors of assessment and errors of law committed by the Commission in breach of Article 92(3)(c) of the Treaty and Article 61(3)(c) of the EEA Agreement

General aspects

The contentions based on breach of the principle of proportionality applicable in regard to State aid

undertaking 'although they were not necessary for the attainment of the objectives specified in Article 92(3)'.

A - The contention that the Commission was wrong to authorise the purchase by Air France of 17 new aircraft

Summary of the parties' arguments

receiving explanations (Joined Cases 296/82 and 318/82 Netherlands and Leeuwarder Papierwarenfabriek v Commission [1985] ECR 809, paragraph 19).

72/87 Exécutif Régional Wallon and Glaverbel v Commission [1988] ECR 1573, and to Commission Decision 90/70/EEC of 28 June 1989 concerning aid provided by France to certain primary processing steel undertakings (OJ 1990 L 47, p. 28).

'... an integral element of its plan to rationalise its fleet ... This investment is a key element of [the] Plan' (point 22 on page 22 of the Report).

B - The contention that the Commission wrongly authorised the financing of operating costs and operational measures of Air France

Summary of the parties' arguments

Findings of the Court

undertakings, in other economic and political contexts and at other times, may be irrelevant.

p. 76). In the light of the relatively modest figures set out in this connection by the applicants in Case T-371/94 (FF 150 million and FF 500 million), the Court takes the view that the Commission was entitled to accept that those measures would be covered by revenue deriving from Air France's sale of its own assets and from current operating revenue.

C - The contention that the securities issued by Air France between 1989 and 1993 were misclassified

Summary of the parties' arguments

permanently retained by the issuer. That amount corresponds to the issuer's liability to pay interest on an annual basis during 15 years on the whole amount of the TSDIs. In the Commission's view, the insistence of the applicants that the issuer permanently retains part of the proceeds from the issue of the repackaged TSDIs is based on a subjective analytical approach which would make any loan capable of being regarded as an equity injection.

Findings of the Court

D - The contention that Air France's debt/equity ratio was misconstrued

Summary of the parties' arguments

depending on the method of calculation). The excessive nature of the aid is all the more evident if one contrasts Air France's debt/equity ratio (1.12:1) with the average debt/equity ratios (2.57:1 in 1992 and 3.17:1 in 1993) recorded in the IATA publication 'Airline Economic Results and Prospects' (Annex 12 to the reply).

a consolidated trend in financial analysis, it used a net figure. The debt/equity ratio was therefore not inflated by the use of a gross debt figure.

Findings of the Court

to the application and Annexes 9 and 10 to the reply), of Professor Vermaelen (Annex 7 to the statement in intervention of Air France), and of Doctor Weinstein (Annex 1 to the statement in intervention of the United Kingdom).

'Debt-to-equity ratios

...

Airline executives were asked their views on an optimal debt-to-equity ratio for an airline. Responses range from 0.5:1 to 4:1; however, it is unclear whether these responses include or exclude long-term operating leases in the debt amounts. The average of the responses received indicate an optimal debt-to-equity ratio of 1.5:1.

Airline executives were then asked to provide their airlines' debt-to-equity ratios, both on the bases of including and excluding long-term operating leases in debt.

The average debt-to-equity ratio of airlines responding is 2.3:1 including long-term operating leases in debt and 2.1:1 excluding long-term operating leases from debt.

...

There is significant variation in how debt-to-equity ratios are calculated and it is therefore difficult to make meaningful comparisons between airlines. ...'

E - The contention that the Commission wrongly failed to require Air France to sell disposable assets

Summary of the parties' arguments

Royal Air Maroc) and one other company (Servair). In aggregate, they value those shareholdings at between FF 3.1 billion and FF 6 billion.

some of the companies belonging to the Air France group, such as Groupe Servair, are very profitable and could therefore have realised a substantial price on sale. Others are loss-making, so that their sale or winding-up could be expected to provide a substantial reduction in the losses of the Air France group and a corresponding reduction in the need for aid.

France. The nature and extent of various airline companies' interests render comparisons futile.

(75% held by Air France) in the share capital of Saresco, and consequently of its subsidiary engaged in cheese manufacture, was sold off. The sale of the Méridien hotel group, which had actually taken place in the interim, involved 20 out of the 103 companies in the group. It is clear from the contested decision that other sales were contemplated under the Plan. The expected timetable for the sales and the estimated amount to be raised from them were provided to the Commission for all non-core assets with significant value. However, those assets were not explicitly identified in the decision for obvious reasons of confidentiality.

Findings of the Court

airline companies, alongside Lufthansa and British Airways. Since it involves complex assessments of economic policy, the exercise of the discretion which the Commission enjoys under Article 92(3)(c) of the Treaty, and which resulted in the adoption of the contested decision, may be open to censure in the present context only if there was a manifest error of assessment or an error of law, a fortiori in the light of the fact that the Commission took care to ensure, by spreading payment of the aid over three tranches, that developments in Air France's financial situation could be monitored, enabling it, if necessary, to adapt the amounts to be paid (contested decision, OJ, p. 86).

the Commission was entitled to form the view that Air Charter constituted an essential component of Air France's air transport activity.

aircraft and did not specifically earmark that fleet for such feeder traffic. On the contrary, it was particularly on long-haul routes that this plan envisaged growth in Air France's supply, which presupposed intensified use of its fleet in that sector. On that view, the provision of services on the domestic market was essentially a matter for Air Inter, which had to use its own aircraft for that purpose. It was not for the Commission to order Air France to concentrate on the domestic market, since such a measure would have risked weakening its position on international flights.

- Finacta, controlled by Air France, was to approve the appointment of the chairman and vice-chairman of Sabena (with a right of veto) and could block decisions of Sabena's governing board involving changes in strategy, business planning, investment plans and industrial cooperation plans;

- the chairmen of Air France and Sabena were required to act jointly in the event of major difficulties involving the functioning of their governing bodies or strategy implementation;

- the basic lines of Sabena's future strategy had been determined in conjunction with Air France.

it was necessary to prevent Air France's holding in Sabena, which constituted an instrument of strategic alliance for Air France, from being relinquished in such a way that a competitor could assume the privileged position previously occupied by Air France.

disposing of its shareholding. In those circumstances, the Commission was not under any obligation to infer from the press rumours, to which the applicants have referred, of the impending acquisition by Swissair of the shareholding in question, that, by July 1994, Air France no longer regarded its holding in Sabena as an important strategic element in its air transport activity.

the FF 7 billion which Air France hoped to realise on the sale of Méridien, one building and 34 aircraft served merely to limit the aid to FF 20 billion, and not to reduce this amount. It was only when it came to payment of the second and third tranches of the aid that the Commission reserved the right to take account of Air France's overall financial situation by having regard to sales of assets effected in the interim. The Court takes the view that the financial questions raised in connection with those sales, including questions touching on their proportionality and confidentiality, can therefore be examined only in the light of the decisions dealing with those second and third tranches. The present litigation does not concern the legality of those decisions.

The contentions that the Commission erred in considering that the aid was intended to promote the development of economic activity and would not adversely affect trading conditions to an extent contrary to the common interest

A - The contention that the Commission wrongly authorised aid intended for the development, not of an economic activity, but of a particular undertaking

Summary of the parties' arguments

Findings of the Court

B - The contention that the Commission wrongly authorised aid which adversely affected trading conditions to an extent contrary to the common interest

Summary of the parties' arguments

activities without the benefit of State aid. In its judgment in that case (paragraph 50), the Court of Justice upheld the Commission's decision refusing to authorise State aid on the ground that it had reduced the competitiveness of other manufacturers within the Community, at the risk of forcing them to withdraw from the market even though they had previously been able to continue their activities by virtue of restructuring financed by their own resources. The applicants also refer to the Opinion of Advocate General Sir Gordon Slynn in Germany v Commission (cited above in paragraph 58) and to paragraph 26 of the judgment in Philip Morris (cited above in paragraph 79), to the effect that the Commission, when applying Article 92(3)(c) of the Treaty, must take account of the Community context, in particular the overall position in the sector in question.

state in this regard that they operate the route between Lyon and Birmingham and wished, from 16 October 1995, to operate between Billund and Paris (CDG). The effects of State aid, they consider, are apparent not only in the narrow market served by the carrier receiving the aid, defined by reference to city pairs, but also in a wider passenger market and on indirectly competing routes.

conditions to be complied with by the French Government, instead of subjecting the restructuring plan to detailed examination is, it is argued, contrary to the rules governing the Commission's exercise of its discretion in this area. The Commission could not avoid carrying out itself the assessment which Community law requires by instead laying down a number of conditions.

Commission takes the view that the contested decision satisfies the requirements of Article 190 of the Treaty as regards the evaluation of the impact of the aid on trading conditions.

Findings of the Court

1. As regards the statement of reasons

routes. Receipt of State aid by a major carrier such as Air France could affect the competitive balance on these routes.

- not to increase the number of aircraft in Air France's operating fleet beyond 146 (commitment No 7);

- not to increase Air France's supply beyond the level reached in 1993 for routes between France and the other EEA countries (commitment No 8);

- to ensure that Air France would not apply tariffs below those of its competitors for an equivalent supply on the routes that it operated within the EEA (commitment No 9);

- not to grant preferential treatment to Air France in the matter of traffic rights (commitment No 10);

- to ensure that Air France would not operate more scheduled routes between France and the other EEA countries than it did in 1993, that is to say, 89 routes (commitment No 11);

- to limit the supply of Air Charter to its 1993 level (commitment No 12) (contested decision, OJ, pp. 79, 86, 88 and 89).

- the French authorities undertook to modify, in accordance with Decision 94/290/EC of 27 April 1994 on a procedure relating to the application of Council Regulation (EEC) No 2408/92 (Case VII/AMA/II/93 - TAT - Paris (Orly)-London) (OJ 1994 L 127, p. 22), the traffic distribution rules for the Paris airport system in such a way as to make them non-discriminatory (commitment No 15);

- the French authorities undertook to ensure that the work required to adapt the terminals at Orly South, reserved for international traffic, and Orly West, reserved for domestic traffic, would not affect competitive conditions to the detriment of the airline companies operating there (commitment No 16);

- it adopted, on 27 April 1994, a decision under which France was required to authorise Community carriers to exercise their traffic rights on routes between Paris (Orly) and Toulouse and between Paris (Orly) and Marseilles at the latest by 27 October 1994 (contested decision, OJ, pp. 87 and 88).

have on the various routes served by Air France, the Commission chose to impose on the French State the 16 conditions governing authorisation of the aid set out in Article 1 of the contested decision. It thus took the view that those conditions were appropriate and sufficient to ensure that the effects of the aid on the civil aviation sector coming within the scope of Article 92 of the EC Treaty and Article 61 of the EEA Agreement would not be contrary to the common interest.

of view, Air France - financially strengthened by the aid authorised - was thus entirely free to extend its capacity, increase the number of its connections, and to apply tariffs as low as it wished on international routes outside the EEA.

routes, without in any way compromising the success of its restructuring. As for feeder traffic, suffice it to note that nothing obliges Air France to assume responsibility for this itself, since such traffic towards the Paris hub can be assured by any airline company distinct from Air France, such as Air Inter, which is not subject to the conditions of authorisation imposed by the Commission (see paragraph 215 above); the economic significance of condition No 9, in so far as it covers the feeder traffic ensured by Air France within the EEA, thus appears insignificant in relation to the global problem posed by non-EEA routes.

the argument relating to Air France's pricing practices on its non-EEA network, allegedly operational measures financed by the aid (see paragraphs 142 and 143 above).

2. As regards the soundness of the reasoning

process of privatising Air France (Article 1(2) of the contested decision, OJ, p. 88), the Commission thus took account of the fact that Air France belonged to the public sector. The fact that the Commission approves aid paid to a public undertaking does not per se amount to discrimination against private undertakings in competition with the beneficiary of the aid. As is clear from paragraph 19 of the judgment in Italy v Commission (cited above in paragraph 125), the Commission must, even in the area of State aid, respect the principle of equal treatment as between public and private undertakings. It follows that the Commission could authorise the disputed State aid without discriminating against Air France's private competitors, provided that the aid did not adversely affect trading conditions to an extent contrary to the common interest.

mistaken to cover, for that purpose, the whole of Air France's area of operations with a network of obligations designed to protect all of its actual or potential competitors against any aggressive policy which it might be tempted to pursue, a fortiori since the Commission reinforced the mechanism of the conditions of authorisation by requiring, in the third paragraph of Article 2 of the contested decision, that the fulfilment of those conditions be verified by independent consultants.

examination as having no bearing on the issue. In so far as it might subsequently transpire that those conditions have not been fully complied with or that Air France has in fact succeeded in abusively circumventing them, it would in that case be for the Commission to envisage a possible reduction in the authorised amount when it came to the payment of the second and third tranches of the aid or to consider whether the French Republic ought to be required to recover in full or in part the aid paid.

(a) Condition of authorisation No 1

Summary of the applicants' arguments

under an 'AF' code. That use of the 'AF' code allows a route consisting of a domestic flight provided by Air Inter and an international flight provided by Air France to be presented as a seamless flight, thereby receiving priority in the computer reservation system.

Findings of the Court

State aid, had to be able to regain its operating freedom once the restructuring phase, with the concomitant restrictions imposed by the Commission, had been completed.

take the view that Air France's position would be weakened if, instead of authorisation of the aid in conjunction with the establishment of the holding company described above, Air Inter had been required to mobilise its own capital or incur debts itself in order to contribute to the financing of Air France's restructuring. In those circumstances, Air Inter cannot be described as an indirect beneficiary of the aid.

(b) Condition of authorisation No 3

- 1994: 1 556 200 equivalent revenue passenger kilometre/employee,

- 1995: 1 725 500 equivalent revenue passenger kilometre/employee,

- 1996: 1 829 200 equivalent revenue passenger kilometre/employee'.

Summary of the applicants' arguments

costs, particularly when an airline operates all-cargo aircraft. This contributes to making an airline carrying cargo appear extremely efficient in comparison with an airline carrying passengers.

Commission also included among the seven two airline companies, SAS and Swissair, which fly, on average, much shorter routes than Air France and whose productivity thus appears unusually low. Only a comparison with companies having activities and flying distances similar to those of Air France would, they argue, be appropriate. To measure Air France's efficiency within the air transport sector, it would have been more meaningful to compare its expected productivity with that of 'healthy' airlines such as KLM, British Airways, SAS and Lufthansa. In any event, such a comparison was necessarily approximate since the Commission could not have had a precise idea of the continuing restructuring undertaken by the group of companies in question.

Findings of the Court

own restructuring plan, which specifically envisaged a reduction in staff, better utilisation of its fleet and crews and a lowering of costs. The Commission was therefore justified in omitting to take account of wet-leases in this connection.

(c) Condition of authorisation No 6

Summary of the applicants' arguments

Findings of the Court

(d) Condition of authorisation No 7

Summary of the applicants' arguments

nothing to stop Air France funding the acquisition of aircraft for Air Inter. The strategy of the Air France group, they argue, was to make Air Inter a European carrier. In this connection, the operation of specific routes which Air France had previously operated was being transferred to Air Inter. Such a mechanism was, in effect, tantamount to Air France's being able to increase its operational fleet beyond 146 by relying also on the fleet of its sister company, which remained unfettered by any commitments.

Findings of the Court

(e) Condition of authorisation No 8

million available seat kilometre). The supply could be increased by 2.7% each year, unless the growth rate of each of the corresponding markets is lower. However, if the annual growth rate of these markets exceeds 5%, supply could be increased beyond 2.7% by the amount of increase above 5%'.

Summary of the applicants' arguments

point out in this regard that, if it was unlikely that Air France would operate more domestic routes, this was a result of its strategic plan, which allocated the domestic network and certain European routes to Air Inter.

Findings of the Court

(f) Condition of authorisation No 9

Summary of the applicants' arguments

expression 'on the routes that it operates within the European Economic Area' covered the provision of charter services by Air Charter.

Findings of the Court

(g) Condition of authorisation No 10

Summary of the applicants' arguments

Findings of the Court

(h) Condition of authorisation No 11

Summary of the applicants' arguments

Findings of the Court

(i) Condition of authorisation No 12

Summary of the applicants' arguments

Findings of the Court

(j) Condition of authorisation No 13

Summary of the applicants' arguments

Findings of the Court

but no mechanics or crew personnel (paragraph 234 of the application in Case T-371/94). In those circumstances, the Commission was justified in discounting the economic impact that such sales or provisions of services might have had.

(k) Conditions of authorisation Nos 15 and 16

- '[modify,] with the cooperation of Aéroports de Paris ..., as soon as possible, ... the traffic distribution rules for the Paris airport system in accordance with the Commission decision of 27 April 1994 on the opening of the Orly-London link' and

- 'ensure that the work required to adapt the two terminals at Orly carried out by Aéroports de Paris, and a possible saturation of one or other of those terminals, do not affect competitive conditions to the detriment of the companies operating there'.

Summary of the applicants' arguments

services from Orly South. As a result, only a radical modification of the Plan could have avoided discrimination against Air France's competitors.

Findings of the Court

The contentions alleging that the Commission committed errors in concluding that the restructuring plan was capable of restoring Air France's economic viability

- Findings of the Court

voluntary basis. It was thus highly unlikely that the desired 30% increase in productivity would be achieved. The Plan did not recommend any reduction in the benefits enjoyed by Air France staff. It provided only for a reduction of 5 000 jobs over three years, whereas Lufthansa had shed 8 000 jobs over two years and British Airways 4 000 over one year. In addition, the Plan failed to take account of the overcapacity crisis within the Community air transport sector; indeed, it even envisaged an increase in the fleet and in capacity.

at fleet and network level), reorganisation of the company and employee participation. The Commission added that implementation of the Plan was to be financed through the increase in capital and the sale of non-core assets (contested decision, OJ, pp. 75 and 76).

sufficient statement, as regards the reasoning of that decision, that the Commission believed that it was possible for the restructuring plan in question to be achieved and that it had reserved for itself the means of recourse that it thought appropriate, in the event that such achievement were compromised. If the conditions set out in Article 1 were not complied with, the Commission could refer the matter directly to the Court of Justice under the second subparagraph of Article 93(2) of the Treaty (see paragraph 348 above). Furthermore, Article 2 provided that proper implementation of the restructuring plan was a condition governing payment of the second and third tranches of the aid.

particularly manifest and serious error when assessing such a plan that the Court may rule against the authorisation of State aid intended to finance such restructuring. In the present instance, no such error has been established. However, the Court points out that it has been unable to examine the productivity targets to be achieved by Air France with specific regard to its non-EEA air routes, since the reasoning on this point in the contested decision is insufficient (see paragraph 280 above).

The remaining contentions

III - The plea alleging infringement of Article 155 of the Treaty

Commission's powers. It cannot therefore be argued that each time the Commission infringes a specific Treaty provision such infringement involves an infringement of the general provision of Article 155. It follows that this plea must in any event be dismissed.

IV - Conclusion

Costs

On those grounds,

THE COURT OF FIRST INSTANCE (Second Chamber, Extended Composition)

hereby:

1. Joins Cases T-371/94 and T-394/94 for the purposes of judgment;

2. Annuls Commission Decision 94/653/EC of 27 July 1994 concerning the notified capital increase of Air France;

3. Orders the Commission to pay the costs, including those of the interveners Maersk Air I/S and Maersk Air Ltd;

4. Orders Compagnie Nationale Air France, the French Republic, the Kingdom of Denmark, the United Kingdom of Great Britain and Northern Ireland, the Kingdom of Sweden and the Kingdom of Norway to bear their own costs.

BellamyLenaerts Briët Kalogeropoulos Potocki

Delivered in open court in Luxembourg on 25 June 1998.

H. Jung A. Kalogeropoulos

Registrar President