4-Jul-2013 12:58 PM

European Commission consults on new state aid rules for airports and airlines

European Commission stated (03-Jul-2013) it is inviting comments on its review of EU state aid rules on the public financing of airports and start-up aid to airlines. The EC noted: "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". EC VP in charge of competition policy Joaquín Almunia 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 EC said it is seeking to curtail investment aid for airports with more than 5 million passengers p/a in a bid to lift the burden on taxpayers and ensure fairer competition. Investment aid for such airports should not be allowed, as investments could be privately funded, according to the draft guidelines. The measures are scheduled to take effect from early 2014, after the industry has been consulted. The EC has published a draft of revised state aid rules for the public funding of airports and start-up aid to airlines, which has the following key pillars:

  1. 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;
  2. 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.
  3. 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. [more - original PR- European Commission] [more - original PR - European Commission II] [more - original PR - Speech]

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