State aid for airports and start-up aid to airlines - questions & answers10 July 2007
by eub2 -- last modified 10 July 2007
In September 2005 the European Commission adopted "Community guidelines on financing of airports and start-up aid to airlines departing from regional airports" (hereinafter the 2005 aviation guidelines). These guidelines were put in place to codify Commission practice and to take account of changes which had taken placed in the European aviation market. The 2005 guidelines reflect the jurisprudence of the "Aeroports de Paris" cases wherein the European Courts have clarified that airport management and operation activities consisting in the provision of airport services to airlines and to the various service providers within airports are economic activities. The guidelines also reflect the competitive situation of the fully liberalised air transport market in place since the completion of the third aviation liberalisation packet in the 1990s.
The guidelines cover two major areas, start-up aid for new air routes but also the financing of airport infrastructure and operations; the 2005 aviation guidelines do not replace the pre-existing aviation state aid guidelines of 1994, but rather seek to complement these by dealing with areas not covered therein.
1. What is the legal framework applicable to State aid for Airports and airlines?
The Commission' assessment of State aid to airports and start-up aid to airlines is based on the Community guidelines on financing of airports and start-up aid to airlines departing from regional airports (published in the Official Journal C 312, 09/12/2005, p. 0001.
These guidelines only consolidate prior Commission practice in the field, as developed for instance in the 2004 State aid decision regarding State aid for the operations of Ryanair from Charleroi airport (published in the Official Journal L137, 30/04/2004, p. 0001) and in the 2005 State aid decision on German Regional Airports.
2. How has the Commission until today applied these rules?
The Member States started applying the new rules by notifying to the Commission individual measures and schemes. On the basis of these notified measures, the Commission has adopted 14 decisions, relating to two the main types of State aid defined by the 2005 guidelines – State aid to the airports and start-up aid to airlines.
The decisions relating to State aid to airports were:
- the 2006 decision on City of Derry Airport (20 million EUR)
- the 2006 Irish regional airports capital expenditure scheme (65 million EUR)
- the 2007 decision on Tortoli Arbatax airport (3 million EUR)
- the 2007 decision on Augsburg airport (9 million EUR)
- the 2007 decision on Memmingerberg airport (15 million EUR)
- the 2007 decision on Lodz airport (4.9 million EUR)
- the 2007 decision on Tallinn Airport
In total, the Commission has approved State aid for airport infrastructure to a total value of approximately 117 million EUR, and found that the investments in Tallinn airport (worth 67 million EUR) did not constitute State aid.
These decisions mainly relate to financing of airport infrastructure, its construction, extension, and purchase of the equipment with the aim to comply with safety and security standards and to be able to accommodate bigger aircrafts and related increase of passengers. Indeed, as the operation of the airports constitutes an economic activity, the Commission assessed these measures in view of the State aid rules and in particular, it assessed its impact on competing airports.
In all of the cases involving compatible aid, the Commission decided that the criteria set out in the guidelines were fulfilled. In particular, the Commission considered that the planned investments had a positive impact on regional development, which outweighed the potentially negative impact on competition.
The Commission has also examined several notifications relating to start up aid. The most important decisions in this respect were:
- the 2006 U.K. route development scheme (36 million EUR)
- the 2006 Maltese route development scheme (58 million EUR)
- the 2006 decision on new routes from Toulon airport (1.5 million EUR)
- the 2007 decision on the Puglia route development scheme (63 million EUR)
- the 2007 decision on the Antwerp Airport start up scheme (4.1 million EUR)
In all these cases, the Commission found that the start-up aid respected all the criteria set out in the 2005 guidelines. The total amount of start-up aid authorized so far is 162.6 million EUR.
3. How is the Commission ensuring compliance with the guidelines in cases were Member States have not notified their State aid measures?
Since the entry into force of the 2005 guidelines, the Commission has carefully followed their implementation in the Member States. In this respect and as stipulated in paragraph 83 of the guidelines, Member States were asked to confirm in writing their acceptance of the guidelines by 1 June 2006 at the latest. According to the same paragraph, Member States had subsequently until 1 June 2007 to amend their existing schemes to conform to these guidelines.
This 18 month period was designed to allow Member States to bring all existing schemes in line with the guidelines. The Commission has been in contact with national authorities in this respect, reminding the Member States of their duty to confirm the acceptance of the guidelines and requesting from the Member States information about their existing measures in force. The information provided has been subsequently examined by the Commission.
The Commission has also received a large number of complaints from competing airports and airlines (approximately 40) concerning State aid that has not been brought into line with the guidelines. The Commission is carefully investigating these complaints. A number of these may be closed, because the information provided by the Member States has demonstrated that the complaints were not founded.
In a number of other cases, the Commission is continuing its preliminary
investigations. For four of these cases, the Commission has decided today to
open the formal investigation procedure. The other cases remain under
investigation, and the Commission will take formal decisions thereon when the
information at its disposal allows it to take a position.
Source: European Commission