State aid - Case 5

State aid to Olympic Catering - Estimation of abnormal costs of voluntary retirement scheme

State aid case in the airline catering industry. We advised Olympic Catering (OC) and the Greek government on potential State aid to OC. In particular, we estimated the abnormal costs of a voluntary retirement scheme implemented by OC. A reduction in work force was needed to balance the expected loss in business due to the privatisation of OC's former mother company and principal customer. Since OC had negotiated its employment contracts while being a State-owned undertaking, its employees (1) enjoyed higher than market wages and (2) could not be made redundant. We assessed the resulting abnormal costs of the voluntary retirement scheme using simulation and benchmarking techniques. State aid was approved.