The European Commission adopted today new guidelines on how Member States can support airports and airlines in line with EU state aid rules. The guidelines are aimed at ensuring good connections between regions and the mobility of European citizens, while minimising distortions of competition in the Single Market. They are part of the Commission’s State Aid Modernisation (SAM) strategy, which aims at fostering growth in the Single Market by encouraging more effective aid measures and focusing the Commission’s scrutiny on cases with the biggest impact on competition.
The new guidelines for State aid to airports and airlines aims to promote sound use of public resources for growth-oriented initiatives. At the same time, they aim to limit distortions of competition that would undermine a level playing field in the Single Market, in particular by avoiding overcapacity and the duplication of unprofitable airports.
Key features 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. The new guidelines 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 ones.
- Operating aid to regional airports (with less than 3 million passengers a year) will be allowed for a transitional period of 10 years under certain conditions, in order to give airports time to adjust their business model. To receive operating aid, airports need to work out a business plan paving the way towards full coverage of operating costs at the end of the transitional period. As under the current market conditions, airports with an annual passenger traffic of below 700 000 may face increased difficulties in achieving full cost coverage during the transitional period, the guidelines include a special regime for those airports, with higher aid intensities and a reassessment of the situation after 5 years.
- Start-up aid to airlines to launch a new air route is permitted provided it remains limited in time. The compatibility conditions for start-up aid to airlines have been streamlined and adapted to recent market developments.
The formal adoption and publication of the new guidelines in the Official Journal in all EU official languages is foreseen for March 2014. The new guidelines are available here, with a policy brief ‘New State aid rules for a competitive aviation industry’, here.