Recapitalisation of Air France: Vueling in first place for the allocation of 18 slots at Paris-Orly airport

Europe
Available languages: FR

On 20 September 2021, the European Commission approved the allocation to Vueling of 18 daily slots at Paris-Orly airport following a selection procedure over the summer. This measure is part of the recapitalisation of Air France by the French State, which was conditionally authorised by the Commission on 5 April 2021 under the Temporary Framework for State aid. Vueling will be able to operate new routes from November 2021.

As a reminder, the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak, adopted by the European Commission in March 2020, is based on Article 107(3)(b) TFEU and aims to remedy the significant disruption to the EU economy. The Temporary Framework has been amended several times to extend its scope and duration to allow Member States to grant aid in different forms. Recapitalisation measures are covered, subject to strict conditions of necessity, appropriateness, size of intervention, governance, remuneration, exit strategy, protection of competition, prohibition of cross-subsidisation and undue distortion of competition, etc.

In this case, the Commission considered that additional conditions were necessary to preserve effective competition in the market, such as the support measures for Deutsche Lufthansa approved on 5 November 2020. Air France, which has significant market power at the congested Paris-Orly airport, undertook to make 18 daily slots available to one of its competitors at Orly, the selected competitor being required to base the aircraft operating these slots at the airport.

For this reason, a trustee has been appointed to monitor and ensure compliance with the various commitments made. A transparent and non-discriminatory procedure was therefore established and published on 25 June 2021 to allow competitors of Air France to submit their best offer to take over these slots. Several airlines submitted proposals to obtain these slots, which are in high demand as the airport has reached saturation point. 

These proposals were examined by the European Commission, assisted by the trustee, giving priority to carriers already using Paris-Orly airport as a base, and then ranking the proposals according to their level of capacity and connectivity.

The airline Vueling (IAG group) was ranked first among the air carriers. An agreement must now be concluded with Air France to allow Vueling to operate the 18 slots. The other candidates may decide to challenge the Commission decision. 

Such modalities for a slot transfer are exceptional but is justified by the particular context of the support measures granted to the French airline.