COVID-19: European Commission gives green light to aid scheme for German airports

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In a decision of 11 August, the European Commission authorised a German aid scheme to support German airport operators. The scheme was authorised partly on the basis of Article 107(2)(b) TFEU and partly under the Temporary Framework, to meet the measure’s objectives.

Under the scheme, German authorities, at various levels, will be able to either compensate airports through direct grants for revenue losses directly caused by the COVID-19 crisis or provide liquidity support in the form of grants, loan guarantees, subsidised interest rates and deferrals of certain taxes and charges to airport operators facing liquidity shortages as a result of COVID-19. The scheme gives the impression that only public owners may give aid in proportion to their share. However, these are apparently misleading formulations and general considerations, and are not binding. Therefore, all bodies that are competent under German law can grant an aid under this state aid scheme.

Applications must be submitted by 30 September 2020. Aid under the scheme may be granted until 31 December 2020.

With respect to damage compensation, the scheme provides for compensation for airport operators of up to 100% of the damage suffered for the period 4 March 2020 to 30 June 2020, provided that the beneficiary can demonstrate a direct causal link between the damage suffered and the COVID-19 containment measures.

The damage will be calculated on the basis of the loss of revenue and avoided costs during the above-mentioned period. Both loss of revenue in aviation (airport fees) and non-aviation (rent, revenue sharing, parking, fuelling, advertising or other investments) can be taken into account.

The calculation involves comparing the airport’s financial results during the compensation period with the results it would have expected to achieve in the absence of the COVID-19 restrictions, by reference to the same period of the previous year (March 4 to June 30, 2019).

The scheme also provides for a repayment clause, so that any compensation in excess of the damage actually incurred will have to be reimbursed, plus interest.

The Commission therefore considered that the measure is in line with Article 107(2)(b) TFEU.

It should be noted that the damage compensation cannot be combined with the liquidity support under the scheme if the latter is a direct grant. A combination with other liquidity support (e.g. subsidised interest rates) is possible. As regards liquidity support measures, most of them fall under existing schemes previously approved by the Commission under the Temporary Framework, with the exception of tax and charge deferrals.

In fact, the scheme provides for the option to (i) defer the payment of taxes, (ii) access instalment plans for tax liabilities more easily, (iii) suspend tax debt recovery and (iv) obtain expedited tax refunds.

With respect to thedeferrals oftax and charges,the Commission examined the compliance of this measure with the conditions set out in the Temporary Framework. In particular, the Commission found that (i) the measure supports undertakings active in a sector particularly affected by the COVID-19 crisis, (ii) the aid will be granted before 31 December 2020, the end date of the deferrals being not later than 31 December 2022, and (iii) monitoring and reporting measures have been adopted by the German authorities.

The Commission therefore concluded that the measures were necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework.

This aid scheme in favour of German airports is the third to be examined by the European Commission, even though a large number of measures in favour of airlines have already been adopted by the Member States and approved by the Commission. This is therefore quite surprising for a sector which is particularly affected by the COVID-19 pandemic. In view of the measures adopted in favour of Walloon airports and Timisoara airport, there is every possibility that other decisions will be taken in the coming weeks.