14-Jul-2011 12:05 PM

EU investigates French, German airport aid

European Union plans to launch “in-depth investigations” into state aid granted to German and French airports and used to subsidise services from low-cost carriers (Reuters, 13-Jul-2011). State aid is generally forbidden under EU law, but it is permitted for smaller airports in order to boost the economy of less developed regions. The European Commission said it had "doubts whether the subsidies are necessary" and "whether the aid was proportionate". Marseille Airport and Frankfurt Hahn are believed to be the most concerning cases to the European Commission. It will also look at Ireland’s 2009-2011 travel tax, which it believes may have unduly favoured Irish airlines because it imposed a lower duty on short-haul services.

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