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EC Approves Social Aid For Air Travel Between Madeira And Portugal

by Ulrika Lomas, Tax-News.com, Brussels

12 December 2007


The European Commission has approved changes to a social state aid scheme proposed by the Portuguese authorities for air transport services between mainland Portugal and the Autonomous Region of Madeira.

The scheme, approved by the Commission in 1998, is available to residents of the Autonomous Region of Madeira and students meeting certain criteria.

The eligible applicants must be resident, without discrimination on grounds of nationality, or students who make journeys by air between continental Portugal and Madeira.

Students must meet one of the following additional conditions: attendance at a teaching establishment in continental Portugal or another EU Member State, with last habitual residence in Madeira, or attendance at a teaching establishment in Madeira, with last habitual residence in continental Portugal.

The modified scheme introduces a fixed subsidy of EUR60 per return journey, as long as the fares used by the residents and students are higher than this amount. Other modifications to the existing aid scheme rely on liberalisation of passenger air fares, bringing an end to the maximum amounts to be paid, currently set at EUR151 and EUR113 respectively. Another new feature is that the payment of the subsidy will occur after the event, with beneficiaries having to request its payment from the public body, subject to proof of eligibility.

The Commission has found that the measure is compatible with the EC Treaty, which provides that aid of a social character granted to individual consumers without discrimination as to the origin of the service provider is compatible with the common market. The aid measure is similar in scope and application to aid measures which have been previously approved by the Commission on the same grounds.


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