COVID-19: Commission approves Spanish aid to compensate Air Nostrum's damage

EU
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On 23 July 2021, the European Commission approved Spanish aid of EUR 9 million to compensate Air Nostrum for the damage suffered as a result of the COVID-19 pandemic on the basis of Article 107(2)(b) TFEU.

Article 107(2)(b) TFEU allows the Commission to declare compatible with the internal market "aid to make good the damage caused by natural disasters or exceptional occurrences". In this respect, the Commission considers that the coronavirus pandemic constitutes an "exceptional occurrence" because of its exceptional and unpredictable nature and its significant impact on the economy.

In this case, the restrictions adopted by Spain and other European countries to limit the spread of the virus have had a significant impact on the activities of Air Nostrum, which has suffered substantial operating losses during the year 2020. The notified aid measure is thus intended to compensate Air Nostrum for the damage suffered in particular during the period from 29 March to 23 May 2020, when the airline was forced to remain on the ground, as a result of the strict travel restrictions in force. The aid will take the form of a direct grant and will cover part of Air Nostrum's overall net losses during this period.

The Commission found that the measure will compensate damage that is directly linked to the COVID-19 pandemic. The Commission also found that the measure is proportionate as the compensation does not exceed what is necessary to make good the damage. 

Air Nostrum had been in the sights of the European Commission in 2020 when the Region of Valencia intended to grant the airline aid of EUR 9 million in order to contribute to the costs of renewing its fleet. As the airline decided to renounce such amount of state aid, the Commission finally closed its in-depth investigation at the end of 2020.

It should be recalled that many aids have already been approved by the European Commission on the basis of Article 107(2)(b) TFEU, including in the air transport sector, for both airlines and airports. Early July, the Commission approved a fifth aid to Alitalia on this basis. Air Belgium also received aid to compensate for the damage at the end of June 2021. In November 2020, the Commission approved a Romanian aid scheme for regional airport operators. In March 2021, the Commission approved aid to the operators of Pisa and Florence airports.