The European Commission is inviting comments on its review of EU state aid rules on the public financing of airports and start-up aid to airlines. During the last ten years, the market environment of the aviation industry has changed considerably. The Commission proposal takes account of this evolution and provides guidance on how Member States can support airports and airlines in line with EU state aid rules. In light of the submissions received, the Commission will adopt revised guidelines in the beginning of 2014.
Joaquín Almunia, Commission Vice-President in charge of competition policy, said: “Our aim is to ensure that taxpayers’ money is well-spent and goes where it is truly needed. The next state aid guidelines will be a key ingredient for a successful and competitive European aviation industry, preserving fair competition regardless of the business model – from flag carriers to low-cost airlines and from regional airports to major hubs”.
The Commission has published a draft of revised state aid rules for the public funding of airports and start-up aid to airlines.
The main provisions of the proposed guidelines (see MEMO/13/639) are:
- State aid for investment in airport infrastructure is allowed if there is a genuine transport need and the public support is necessary to ensure the accessibility of a region. Whereas the current guidelines leave open the issue of investment aid intensities, the revised draft rules define maximum permissible aid intensities depending on the size of an airport, in order to ensure the right mix between public and private investment. The possibilities to grant aid are therefore higher for smaller airports than for larger airports.
- For operating aid to airports, which is not allowed under the current guidelines, the Commission proposes to allow such aid for a transitional period of 10 years under certain conditions, in order to give airports time to adjust their business model. Operating aid will decrease during this period. The path will depend on the financial situation of each airport.
- Start-up aid to airlines to launch a new air route is permitted provided it remains limited in time. In the draft new guidelines, the compatibility conditions for start-up aid to airlines have been streamlined and adapted to recent market developments.
The proposal takes into account the results of a first public consultation in 2011. It also reflects the principles of the Commission’s agenda for State Aid Modernisation (IP/12/458): state aid policy should focus on facilitating well-designed aid aiming at boosting economic growth and furthering other objectives of common European interest, while discouraging harmful aid that does not bring real value added and create distortions to competition in the Single Market.
The proposal is available at:
Comments should be sent by 25 September 2013 to: Stateaidgreffe@ec.europa.eu
Air transport contributes significantly to the European economy, with more than 15 million flights per year, 822 million passengers transported to and from European airports in 2011, 150 scheduled airlines, a network of over 460 airports and work for some 2.3 million people. Airlines and airports contribute more than €140 billion to the EU’s Gross Domestic Product. Linking people and regions, air transport plays a vital role in the integration and the competitiveness of Europe.
Member States’ public funding of airports and airlines is currently assessed under the 1994 and 2005 Aviation Guidelines. The 1994 Aviation Guidelines were adopted in the context of the liberalisation of the market for air transport services and contain provisions for assessing social and restructuring aid to airlines in order to provide a level playing field for air carriers. They were complemented in 2005 by guidelines on the public financing of airports and on the start-up of airline services from regional airports.
Neither of the guidelines has an expiry clause, but in view of the significant market changes that have taken place in the last decade, the Commission has initiated this review, with a first public consultation in 2011 aiming in particular to determine whether a revision would be necessary (see IP/11/445). The main conclusions were:
- The existing guidelines need to be reviewed to take account of market developments. Stakeholders emphasised the need for more clarity and active enforcement of the applicable rules.
- In particular, the rules for the financing of airports need to become more transparent.
- Stakeholders sought more guidance on the application of state aid rules to rebates or other advantages granted by regional airports to certain airlines and considered that rules concerning start-up aid should be simplified.
The draft new guidelines take stock of the new legal and economic situation concerning the public financing of airports and airlines and specify the conditions under which such public financing may constitute State aid within the meaning of Article 107(1) of the Treaty on the Functioning of the European Union (“TFEU”), and when it does constitute State aid, the conditions under which such aid can be declared compatible with the internal market. The Commission’s assessment is based on its experience and decision-making practice, as well as on its analysis of current market conditions in the airport and air transport sectors; it is therefore without prejudice to its approach towards other infrastructures or sectors.
At the same time the Commission is working on around 60 state aid investigations in the aviation sector. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.
Source: European Commision