Air Lib controversy rumbles on

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In summer 2003, attempts are continuing to redeploy the 3,200 employees of the French airline, Air Lib, which went into liquidation in February. Meanwhile, the legal authorities and parliament have both been conducting investigations into the circumstances surrounding the takeover and subsequent bankruptcy of the company .

Air Lib, France’s second largest airline, has been in court-ordered liquidation since 17 February 2003 (FR0303103N). Since then there has been a continuing process aimed at redeploying the company’s 3,200 employees in state-run companies such as Air France and the Paris Public Transit Authority (Régie autonome des transports parisiens, RATP), and in other airlines that have taken over Air Lib’s time slots. However, shortly after the company was ordered into liquidation, what was initially an economic and industrial relations issue became a potential financial scandal.

In March 2003, the Paris Public Prosecutor (Parquet de Paris) opened a preliminary enquiry into asset transfers by Air Lib’s chair and chief executive, Jean-Charles Corbet (a former Air France pilot). The February 2002 ruling by the Créteil commercial court (Tribunal de commerce de Créteil), placing Air Lib in liquidation, did not extend to Holco, Air Lib’s parent company, privately owned by Mr Corbet. Holco is a holding company for a series of subsidiaries providing in-flight meals and stop-over assistance etc, and also includes some 'delocalised' companies. While this set-up is in no way illegal, it has raised doubts in some quarters as to the intentions of the former Air Lib chair and chief executive. Employees only uncovered this very complex arrangement a year after their company had been taken over in 2001. Air Lib’s wealth was, it was alleged, being siphoned off into various subsidiaries registered in the Netherlands or Luxembourg and wholly owned by Mr Corbet. The apparently lack of transparency aroused concern among several trade unions and the Air Lib works council.

A decision was made on 18 March 2003 to open a parliamentary enquiry into the economic factors behind the demise of Air Lib. The committee of enquiry - with Patrick Ollier of the governing Union for the People's Movement (Union pour un mouvement populaire, UMP) in the chair and Charles de Courson of the Union for French Democracy (Union pour la démocratie française, UDF) as rapporteur - focused on the EUR 130 million in public money paid to Air Lib. The former Minister of Transport in the previous Jospin government, Jean-Claude Gayssot, testified before the committee. He was criticised for having failed to deal with the matter in sufficient depth in his drive to save jobs at any price (FR0109175N). He denied having given his backing to the Corbet takeover plan (FR0108160F). The parliamentary report accepts his argument and does not endorse 'the rumour that political pressure was put on the courts to rule in favour of placing Air Lib into the hands of J-C Corbet'.

It has been reported that Air France continued to pay Mr Corbet a salary even when he was in the running to take over a rival airline. It is alleged that Air France was attempting to protect itself from foreign low-cost airlines setting up in France.

The parliamentary committee of enquiry worked very quickly. Within the space of three months, it held a large number of hearings and took a great deal of legal and accounting evidence in an attempt to determine whether Mr Corbet, who had led Air Lib to bankruptcy, had profited financially from the state. It handed its report to the State Prosecutor (Procureur de la République), who will decide on whether to take legal action. According to the report, there might well be enough evidence for a charge of misuse of corporate assets against Mr Corbet.

For their part, several trade unions have accused Mr Corbet of lining his own pocket with Air Lib’s assets and of 'personal enrichment'.

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