EU Commission to fine airports and airlines in Belgium, Germany, Italy and Sweden

Flags in front of the Berlaymont building - headquarter of the European Commission
Flags in front of the Berlaymont building – headquarter of the European Commission (© S. Bertrand CC BY 2.0)

The European Commission has adopted seven decisions following in-depth investigations concerning public support granted to airports and airlines in Belgium, Germany, Italy and Sweden. In particular, the Commission has concluded that the airports of Zweibrücken (Germany) and Charleroi (Belgium) received state aid which was incompatible with EU rules and must now be recovered. In addition, the Commission has opened an in-depth investigation concerning state financial support granted to certain airlines flying from Bruxelles-National airport (Zaventem). The decisions are based on the Commission’s new guidelines on state aid to airports and airlines (see IP/14/172) adopted in February 2014 as part of its State Aid Modernisation (SAM) strategy (see IP/12/458). For further information on each of the decisions please see MEMO/14/544.

Commission Vice President Joaquín Almunia in charge of competition policy said: “EU state aid rules allow public authorities to grant support to airports where it is justified, in particular where it improves the accessibility of a region and provides a significant contribution to its economic development. However, duplicating unprofitable airport infrastructure or unduly favouring certain airlines wastes taxpayers’ money and distorts competition in the Single Market.”

Today, the Commission has adopted decisions on two types of measures:

financial support granted to airports; and

financial conditions offered by airport managers to certain airlines for their operations at the airports in question.

As regards financial support to airports, the Commission has taken into consideration the importance of those airports for local accessibility and economic development as well as the need to prevent or redress undue harm to competing airports. In line with these principles, the Commission has fully approved the state aid granted to the airports of Frankfurt-Hahn and Saarbrücken in Germany, Alghero in Italy and Västerås in Sweden.

In the case of the Zweibrücken airport in Germany, the Commission found that both investment aid and operating aid paid to the airport manager since 2000 are incompatible with the Single Market. Considering that Zweibrücken airport is located approximately 40 kilometers by road from Saarbrücken airport, which had been in operation for decades, had not operated at full capacity when Zweibrücken airport entered the market, and was loss-making, the Commission found that the aid to Zweibrücken airport unnecessarily duplicated already existing, unprofitable airport infrastructure in the same region. Therefore, the aid cannot be justified under EU state aid rules, and gave an undue economic advantage to Zweibrücken airport over its competitors, in particular Saarbrücken airport. This incompatible aid must now be paid back.

As to Charleroi airport in Belgium, the Commission acknowledged that the aid granted to the airport has allowed it to develop considerably since 2002, which has contributed significantly to the economic development of the Walloon Region. However, the aid has procured a considerable economic advantage to Charleroi airport and thereby caused significant distortions of competition which increased over time, as the airport’s traffic was growing. In view of these positive and negative effects, the Commission considered, on balance, that part of this aid can be authorised and that Charleroi airport has to pay back the remainder, amounting to around €6 million. Moreover, Belgium has to ensure that as of now, the concession fee paid by the airport manager in exchange for the right to operate the infrastructures commercially is increased so that it reflects a fair market price.

The Commission has also found that certain agreements concluded by the managers of Zweibrücken and Alghero airports procured the beneficiary airlines an undue economic advantage which they need to pay back. The airlines concerned are TUIFly, Germanwings (a subsidiary of Deutsche Lufthansa) and Ryanair in the case of Zweibrücken airport, and Meridiana and Germanwings in the case of Alghero airport. The Commission’s analysis has demonstrated that these airlines paid less than the additional costs linked to their presence in the airport. For Västerås, Frankfurt-Hahn, Saarbrücken and Charleroi airports, the Commission concluded that the relevant airlines – notably Ryanair – received no undue advantage, because they paid a price higher than the additional costs borne by the airport as a result of the activities covered by the agreements.

Finally, the Commission has opened an in-depth investigation into a Belgian scheme, granting around €19 million of public money per year over the period 2014-2016 to the manager of Bruxelles-National airport (Zaventem airport), who is then to redistribute those amounts to certain airlines flying from the airport. Most of the money was to be allocated to Brussels Airlines. The Commission has concerns that this measure would lead to public money being used to fund ordinary operating costs of selected airlines without furthering any objective of common interest.

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