EU ruling saves Omega Air €35m

AVIATION: In a surprise development, the European Commission has abandoned plans to introduce a measure which would have cost Irish aircraft business, Omega Air, in excess of €35 million.

On Tuesday, Omega Air lost a case taken to the European Court of Justice against the proposed regulation which was due to come into effect on April 1st, 2002.

However, the Commission has now said it is not going ahead with the introduction of the regulation, that would have restricted the use of older aircraft which have been modified to reduce noise.

Omega Air, by way of an operation based in the US, modifies jet aircraft for both commercial and military customers. It leases modified aircraft to airlines and the proposed regulation would have prevented these aircraft being flown to and from EU member- states.

Mr Ulick McEvaddy, who owns Omega Air with his brother, Mr Des McEvaddy, told the High Court in 1999 that the proposed EU measure would cost his company €34.04 million.

He added his bank had told him it might not fund a further investment programme, worth more than €70 million, if the EU regulation was proceeded with. The brothers are understood to have spent more than €2 million on legal fees in the three-year battle.

A source close to Omega said the brothers were delighted with the Commission's decision to abandon the proposed regulation. He said the development was linked to the legal case taken by Omega and to planned action by the US authorities against a measure which would have had a disproportionate effect on the US aircraft sector.

Omega is a major stake-holder in Seven Q Seven Inc, based in San Antonio, Texas, which "re-engines" jet aircraft. NATO and other military purchasers are understood to be interested in having aircraft re-engined by the US operation. Last year Mr Des McEvaddy was involved in piloting a test flight in Texas of a re-engined jet using a new type of engine which NATO may consider placing in some of its Boeings.

Omega also leases in-flight refuelling tankers to military customers, including the US navy.