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IP/11/633

Brussels, 24 May 2011

State aid: Commission opens in-depth investigations into State aid to Romanian air transport sector; approves aid for two regional airports in the UK and in Italy

The European Commission has opened two in-depth investigations under EU State aid rules into a Romanian support scheme for investments in regional airports and to ascertain whether certain rebates and discounts granted by the Timisoara airport to some airlines distort competition. The Commission is particularly concerned that the agreements concluded between Timisoara airport and Wizz Air could procure the latter an unfair economic advantage over its competitors. Separately, the Commission approved investment aid mostly to improve access to an airport in Wales and to promote the use of rail and bus to and from the airport in Italy's Friuli Venezia Giulia region having agreed both subsidies were justified and limited in size.

Commission Vice-president in charge of competition policy Joaquín Almunia said: "The Commission has a duty to investigate when it believes public authorities may be granting subsidies that distort the conditions of fair competition. The rules allow subsidies to compensate for services of general interest and, under certain conditions, to improve access infrastructure or to help start up services at regional airports. They do not allow subsidies to cover operating losses on a continued basis."

Regional airports in Romania

As regards the support scheme for investments in regional airports in Romania, the Commission doubts whether the public financing meets a clearly defined objective of general interest, given the apparent oversupply of airport services in Romania. In addition, the Commission needs to assess whether the upgraded infrastructure is necessary and proportional, in particular with a view to the limited activity of the airports. The initial investigation shows that Romania's regional airports are generally loss-making and that their operating losses are covered by the State on a yearly basis. EU rules allow for aid to start up services at regional airports or to cover for services of general economic interest. They do not allow for covering operating losses on a continued basis.

Timisoara airport

As regards Timisoara airport, the Commission also needs to verify whether the annual subsidies granted to the airport only serve to reduce the airport operator's current expenditures. In the absence of a general economic interest purpose, this would be incompatible with EU rules as it would provide an unfair advantage to the beneficiary with regard to its competitors, who have to operate without aid. The Commission will also further investigate the contractual relations between Timisoara airport and Wizz Air, namely a marketing agreement signed in 2008 and the non-payment of airport charges amounting to €2.6 million as well as additional rebates of 72 to 85 % on all airport charges for large aircraft (i. e. aircraft above 70 tons maximum take off weight).

The Commission is concerned such preferential treatment may have the effect of forcing out of the market the only competitor of Wizz Air on some routes.

The opening of the in-depth State aid investigations gives the Romanian government and interested third parties an opportunity to comment on the measures under assessment. It does not prejudge the final outcome of the investigation

Approval of two investment projects in UK and Italy

In separate decisions, the Commission approved two investment projects at the Cardiff (UK) and Friuli Venezia Guilia (Italy) airports.

In the case of the UK, the investment aims to improve accessibility to and connectivity with the airport from the South and West Wales. The public financing complies with all the criteria set in the 2005 EU Aviation Guidelines and the UK authorities demonstrated the public subsidies are necessary and proportional, as they represent 21.4 % of the total investment.

The public financing for Ronchi dei Legionari airport, in the region of Friuli Venezia Giulia, aims at facilitating the modal shift from road to rail and bus. The investment partly financed by the public authorities concerns the construction of a park-and-ride parking place, a rail station and a bus station at the airport. The Commission found that the public financing is necessary and that the advantages conferred by it are not disproportionate insofar as it does not have an adverse impact on competition and on trade between Member States.

Broader context

The Commission in April invited comments on the application of the 2005 EU Guidelines on the financing of airports and start-up aid to airlines from regional airports. The Commission is also seeking views on the 1994 EU Aviation Guidelines, which contain rules on the assessment of social and restructuring aid for airlines. Submissions can be made until 7 June 2011. In light of the comments received, the Commission will decide, whether the guidelines need to be revised and will consult further before adopting new rules.

The public consultation is available at:

http://ec.europa.eu/competition/consultations/2011_aviation_guidelines/index_en.html

The non-confidential version of the decisions will be published in the Official Journal of the EU and made available under the following case numbers

Romanian regional airports - SA.30931 (N 185/2010)

Timisoara airport, Wizz air and other airlines – SA.31662 (NN/2011)

in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.


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