The European Commission approves three French aid schemes for the aviation sector

Europe
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The French authorities notified the European Commission in June 2014 of three State aid schemes for airports and airlines.

On 7 April 2015, the European Commission approved the French schemes, which will apply to:
  • investment aid for airports;
  • operating aid for airports;
  • start-up aid for new airline routes.
The schemes are founded on the 2014 Aviation Guidelines and provide for identical conditions.

In February 2014, the European Commission adopted its new Guidelines on State aid for airports and airlines. They entered into force on 4 April 2014. They replaced the Guidelines adopted in 2005 following the Commission's first decision in the Charleroi Airport/Ryanair case in 2004.

They formalize the European Commission’s new approach towards airports: to promote sound use of public resources for growth-oriented initiatives and to avoid overcapacity and duplication of unprofitable airports.

The new approach is formalized in the 2014 Aviation Guidelines in the following way:
  • State aid for investment in airport infrastructure may be authorized under stricter conditions and if there is a genuine transport need and if the aid is necessary to ensure the region's accessibility. The new Guidelines set maximum permissible aid intensities, depending on the size of the airport.
  • Operating aid for regional airports that was forbidden under the 2005 Guidelines is allowed for a transitional period of 10 years under certain conditions. Airports with fewer than 3 million passengers a year may benefit from this aid, plugging 50% of the operating funding gap until 2023. Airports with fewer than 700,000 passengers a year may benefit from operating aid, regardless of any transitional period. The aid for those small regional airports may total up to 80% of the average operating funding gap until 2019. Their situation will be reassessed by the Commission before 2019.
  • The new Guidelines provide for fewer conditions for start-up aid for airlines that launch a new air route at a regional airport. Start-up aid takes the form of a rebate of a maximum 50% on airport charges in respect of the new route for three years maximum.
All aid for airports and airlines under the Aviation Guidelines must be notified by Member States to the European Commission prior to being granted and must be formally authorized by the Commission. Unnotified State aid is per se illegal and may be challenged by a competitor before a national judge.

Since the adoption of the 2014 Aviation Guidelines, the Commission has adopted about 20 individual decisions on investigations dating back to 2001 following complaints and relating to Brussels South Charleroi Airport, Marseille Airport, Nîmes Airport, Saarbrücken Airport, Frankfurt Hann Airport, Alghero Airport, etc. It also approved new aid notified by Member States, such as aid for Groningen Airport in the Netherlands and St Mary and Land’s End airports in the United Kingdom.

Nevertheless, considering the number of airports falling within the scope of those Guidelines and the few notifications made by Member States since April 2014, they seem reluctant to notify aid in the air transport sector.

Therefore, in late January 2015, the European Commission sent a letter to all Member States to remind them of their obligation to notify airport aid, to request the list of operating aid granted to airports and to invite them to notify general aid schemes at the national level in order to minimize the number of individual notifications for airports or airlines.

The approval of these schemes by the Commission now allows the competent French administration - the DGAC - to examine whether airport or airline aid is compatible with the schemes without having to notify the European Commission of each individual aid.

The French authorities provided the Commission with a business plan model which the airports must comply with in order to demonstrate both the necessity and the proportionality of the aid they request.

The French aid schemes have been approved for a period of 10 years and the French authorities provided the Commission with monitoring arrangements to ensure that the DGAC complies fully with the Aviation Guidelines.

The French administration will shortly publish both the forms and the procedure for requesting authorization of aid.

It should be emphasized that the French schemes only apply to airports where there is not another airport within 100km or 60 minutes' traveling time (by high-speed train, car or other means). Due to the large number of airports in France, those scheme rules therefore have limited scope of application. Nevertheless, it eases the administrative burden on both airports and the European Commission.

French airports have been under scrutiny from the European Commission following, firstly, a notification by the French authorities of aid to Ryanair at Pau airport and then following a complaint by Air France against 27 airports in relation to Ryanair. The Commission initiated seven formal investigations. Since February, it has closed four investigations concerning Marseille, Pau, Angoulême and Nîmes airports.

The investigations concerning Carcassonne, Paris Beauvais and La Rochelle airports are expected to be finalized before the end of 2015.