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European Commission - Press release

State aid: Commission opens 3 in-depth state aid investigations in air transport in France, Germany and Ireland; clears Dutch air passenger tax

Brussels, 13 July 2011 – The European Commission has opened three separate in-depth state aid investigations regarding the Marseille and Frankfurt Hahn airports as well as lower taxes for air passengers in Ireland that benefit almost exclusively domestic flights. The opening of an in-depth investigation gives interested third parties an opportunity to submit comments on the measures under investigation. It does not prejudge the outcome of the investigation. Finally, the Commission has approved the Dutch air passenger tax system, because it did not favour certain operators in comparison with others.

Joaquín Almunia, Vice-President of the Commission in charge of competition policy, declared: "State aid may, under certain conditions and circumstances, constitute an appropriate instrument to develop small regional airports and air transport services. However, the Commission also has a duty to avoid distortions of competition within the EU's single market and some of the regional airports in Europe are no longer so new or small". ."

When assessing state aid in the aviation sector, the Commission applies in the first place the 2005 Aviation Guidelines, which enable Member States to provide financing to regional airport handling up to 5 million passengers per year and to airlines to start new routes from these airports. Public authorities may finance infrastructure of regional airports to meet a clearly defined objective on general interest, such as regional development or accessibility. The Commission must verify the necessity and proportionality of other types of aid, the prospects for the use of the infrastructure and an open and non-discriminatory access for the users. It must also balance the benefits of the aid in terms of accessibility and regional development against the negative effects it can have on competitors that have to operate without state support.

Regarding passenger taxes, Member States must be careful not to discriminate between companies or categories of passengers.

Marseille airport (France)

In this first case, the Commission will investigate public support received by the Marseille airport for its low cost terminal "mp2" and fee reductions awarded to airlines, both low cost and incumbent companies. Between 2005 and 2007, the operator of the Marseille airport (the local Chamber of Commerce, CoC), received a subsidy of €7.577 million for the construction of the "mp2" terminal. At this stage, the Commission has doubts whether the subsidy was necessary to carry out the investment and whether the aid was proportionate to the objectives pursued. Moreover, the Commission has doubts whether lower fees for airlines using the "mp2" terminal and discounts for the start-up of new routes did not procure a selective advantage to the beneficiaries, in breach of EU state aid rules. Airlines operating at Marseille airport, be it low cost airlines such as Ryanair, or traditional airlines such as Air France, benefited from these different reductions to different extents. Moreover, the Chamber of Commerce signed an advertisement agreement with Airport Marketing Services, a 100% subsidiary or Ryanair, which in the opinion of a complainant is overpriced. The Commission has doubts at this stage that another investor would have acted in the same way as the CoC when it granted these advantages. The Marseille airport is the country's fourth largest for passenger traffic.

Frankfurt-Hahn airport (Germany)

The Commission will particularly investigate in-depth whether following measures where granted under market conditions: a credit line provided to Frankfurt Hahn airport by the cash pooling facility of the Land Rheinland-Pfalz; the re-financing of loans granted to the airport by the publicly owned Investitions- und Strukturbank and; an underlying guarantee provided by the Land. At this stage the Commission takes the preliminary view that these measures merely contribute to pay the operating costs of the airport. Frankfurt-Hahn airport is currently the 10th largest passenger and the 5th largest cargo airport in Germany and 21st largest in Europe. Therefore, the Commission is particularly concerned that the aid may be giving the airport an unfair advantage vis à vis its competitors.

Irish air passenger tax

On 30 March 2009, Ireland introduced a tax to be paid by airlines for each departing passenger. Until 1 March 2011, two different tax rates applied: €2 for destinations located within 300 km of the Dublin airport and €10 for all other destinations. With the exception of a few airports in western UK, the lower rate applied only to domestic destinations. Following an internal market infringement procedure concerning the free provision of services, the Irish authorities modified the tax so that, as of March 2011, a single rate of €3 applies to all destinations (see IP/11/734). However, the Commission also received a complaint alleging the subsidies during the period distorted the conditions of competition, something that the Commission has a duty to assess. The Commission considered groundless other state aid allegations arising from the fact that cargo traffic and other means of transport as well as transit and transfer passengers are not covered by the tax.

Dutch air passenger tax

The Commission also received a complaint about a Dutch air passenger tax in force between 1 July 2008 and 30 June 2009 when it was repealed. The tax which comprised two rates: €11.25 for final destinations within the EU and maximum 3 500 km from the airport of departure (and for certain locations outside of the EU) and €40 for all other final destinations. The Commission found that the exclusion of other means of transport and cargo traffic from the tax did not result in state aid since the operators of such traffic were not in a situation which is legally and factually comparable to the one of air passenger transport operators. Furthermore, the exclusion of transfer and transit passengers did not constitute state aid because its purpose was to be neutral with regard to the route selected for reaching the final destination and to avoid double taxation. The Commission therefore concluded that these provisions were in the logic of the Dutch air passenger tax system. Moreover, the Commission found that the fixed tax rates, irrespective of the ticket price, conferred no advantage to classic airlines, as opposed to low-cost airlines, because the same tax rate applied to all destinations in the EU.

The Commission currently investigates other cases in the air transport sector, such as the aid to Wizz Air at the Timisoara Airport in Romania IP/11/633, aid to infrastructure at the Leipzig-Halle airport in Germany IP/11/706, aid to Dortmund airport and the airlines using it IP/07/1051.

The decisions will be made available under case numbers SA.22932 (FR), SA.32833 (DE), SA.29064 (IE) and SA.25254 (NL) in the State Aid Register and on the DG Competition website once any confidentiality issues have been resolved. The electronic newsletter State Aid Weekly e-News lists the most recent decisions on state aid published in the Official Journal and on the website.

Contacts :

Amelia Torres (+32 2 295 46 29)

Maria Madrid Pina (+32 2 295 45 30)

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