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Brussels Launches Airport State Aid Probes

by Ulrika Lomas,, Brussels

27 August 2015

The European Commission announced three compliance actions on July 31, 2015, in relation to aid provided to EU airports that is said to be unlawful.

The Commission has referred France to the European Court of Justice for failing to recover incompatible aid received by Ryanair and its subsidiary, Airport Marketing Services, for using Pau, Nîmes, and Angoulême airports, as well as Transavia for using Pau airport.

By decisions on July 23, 2014, the Commission required France to recover close to EUR10m in state aid from the airlines. This was because, through various contractual and marketing arrangements with the airports, the airlines paid less than the additional costs linked to their presence in the airport. The airlines therefore benefitted from an undue economic advantage, which the Commission said must be recovered. The Commission has newly found that France failed to recover the incompatible aid within the required period of four months. Therefore, the Commission has referred the matter to the European Court of Justice.

Separately, the Commission has opened two separate in-depth investigations to examine whether measures in favor of two publicly owned airports in Transylvania, Romania (Cluj-Napoca International Airport and Târgu Mures Transilvania Airport) and airlines operating there (notably Wizz Air) are in line with EU state aid rules.

With similarities to the Ryanair case, its investigations relate to marketing fees paid to Wizz Air by Cluj-Napoca International Airport and low airport charges offered by Târgu Mures Transilvania Airport to airlines operating there. Furthermore, the Commission will also investigate subsidies by local authorities to the airports themselves.

Commenting on the launch of the investigation, Margrethe Vestager, Commissioner in charge of competition policy, said: "There is intense pan-European competition in the aviation sector. Therefore, the Commission must ensure that airport charges and other conditions offered by public regional airports to attract airlines do not distort the level playing field in the market. Our investigations will show if the Romanian measures in favor of the two airports and airlines are in line with EU state aid rules."

Cluj-Napoca International Airport is the second biggest airport in Romania and is operated by a company wholly-owned by Cluj County Council. It served nearly 1.2 million passengers in 2014. Târgu Mures Transilvania Airport served approximately 350,000 passengers in 2014. It is operated by a company wholly-owned by Mures County Council.

The aid may be legitimate if it serves the purpose of connecting these remote areas of Romania to the rest of the country, but only if the aid provided by local authorities was the absolute minimum required to achieve this permitted objective.

TAGS: compliance | European Commission | law | aviation | Romania | fees | France | Europe

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