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European Commission - Press release
State aid: Commission opens in-depth investigation into financing of infrastructure projects at German Leipzig/Halle airport
Brussels, 15 June 2011 - The European Commission has opened an in-depth investigation to verify whether loans and capital injections granted to the Leipzig/Halle airport, in Eastern Germany, to finance new infrastructure projects are in line with EU state aid rules. At this stage, the Commission considers that Germany has not demonstrated that the public funding, which covers 100 % of the total investment costs, is justified and proportionate. The Commission is particularly concerned that the aid may be giving the airport, which has become the European hub of DHL Express, an unfair advantage vis à vis its competitors in Germany or elsewhere in Europe. The opening of an in-depth investigation gives interested third parties the opportunity to comment on the measures under assessment. It does not prejudge the outcome of the procedure.
In April 2010, Germany notified for legal certainty the public financing of new infrastructure measures at Leipzig/Halle airport. The infrastructure and infrastructure-related projects concern in particular noise abatement measures, creation of de-icing areas, construction of taxiways and bridges, extension of aprons and hangars, construction of a new aviation terminal and small aircraft shed, planning costs for the extension of the southern and northern runways, functional security buildings and checkpoints.
The funding consists of injections of capital totalling € 255 million into Flughafen Leipzig/Halle GmbH by its public shareholders, mainly Freistaat Sachsen, and Land Sachsen-Anhalt. As some of the investments started in 2006, the airport operator, Flughafen Leipzig/Halle GmbH, has also received loans from its public shareholders.
Germany takes the view that the construction of the infrastructure at the Leipzig-Halle airport is not economically viable and is of a safety and security nature. It claims that as no private investor would finance this infrastructure, it does not constitute an economic activity in the meaning of EU state aid rules.
However, a ruling by the European Union's General Court, on 24 March 2011, confirmed the Commission's view that the operation of an airport is an economic activity, of which the construction of airport infrastructure is an inseparable part (see MEMO/11/191). The Commission is of the opinion that the notified measures are essential for economic activities undertaken by the airport operator and thus allow the airport to exercise its primary economic activity. The Commission has, therefore, doubts that the investment project falls under the public policy remit. As the capital increases were undertaken without an underlying business plan or assessment of the long-term prospects for profitability, the Commission takes the preliminary view that they involve state aid. The Commission also has doubts that the shareholder loans were granted at market rates.
The Commission, therefore, has doubts whether the financing of the notified infrastructure measures can be considered compatible with EU state aid rules, and in particular the 2005 EU Guidelines on the financing of airports and start-up aid to airlines from regional airports. The Commission considers that a large regional airport as Leipzig/Halle should be able to finance at least part of its infrastructure costs and that the aid is neither proportionate nor limited to the minimum necessary.
The Leipzig-Halle airport serves approximately 2.7 million passengers and, since the construction of the southern runway in 2008, is the European hub of DHL Express. Approximately 524,000 tonnes of cargo were transported to and from the airport in 2009. In view of the airport's good economic prospects, a 100% public funding of the investments seems to be excessive and may trigger a windfall profit for the airport that would distort competition. The airport is in competition with cargo airports not only from Germany but also from other Member States, such as Vatry airport in France and Brussels airport in Belgium.
The Commission has started a review of the 2005 EU Guidelines on the financing of airports and start-up aid to airlines from regional airports (IP/11/445).The consultation period ended on 7 June and the Commission is currently analysing submissions from stakeholders and Member States. In light of the comments received, the Commission will decide whether the guidelines need to be revised and, if so, would consult further before adopting new rules.
The results of the public consultation will be made available in due time on the DG Competition website once any confidentiality issues have been resolved.
The non-confidential version of the decision will be published in the Official Journal of the EU and made available under the case number SA.30743 (ex N 138/2010) 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.