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European Commission

Press release

Brussels, 3 October 2012

State aid: Commission finds that financing of Munich airport's terminal 2 does not contain aid

The European Commission has concluded that financial arrangements regarding Munich airport's terminal 2 are in line with EU state aid rules. In particular, the Commission found that loans by public entities to finance terminal 2 as of 2000 were granted on market terms and therefore did not involve state aid in the meaning of EU rules. Before 2000, EU state aid rules did not apply to the financing of airport infrastructure.

Commission Vice-President in charge of competition policy Joaquín Almunia said: "Today's decision further shapes the Commission's policy of state aid control in the aviation sector. Our ultimate aim is to establish a level playing field for all airlines and airports regardless of their business model – from flag carriers to low-cost airlines."

In 1998, Flughafen München GmbH and Deutsche Lufthansa decided to create jointly-owned companies for the construction and operation of the new terminal 2 at Munich airport. In 2008, following a complaint from Ryanair, the Commission initiated an in-depth investigation regarding alleged state aid to these companies (see IP/08/1199).

The Commission's investigation found that before 2000, the market for airport services was not open for competition and the operation of airports was not considered an economic activity. Airport services were therefore not caught by EU state aid rules. Financing measures irrevocably committed before that date are therefore outside the scope of the Commission's state aid control.

The Commission also found that loans granted after that date by the German public credit institution for development Kreditanstalt für Wiederaufbau (KfW) and by the Bavarian public bank Bayerische Landesbank were granted on terms that a private investor operating under market conditions would have accepted (the market economy investor principle – MEIP) and therefore conferred no economic advantage to the operators and owners of terminal 2.

Background

Until recently, the development of airports was often determined by territorial considerations or, sometimes, military requirements. Airports were operated as part of the public administration rather than as commercial undertakings. Competition between them was limited and only developed gradually. Taking into account these facts, the financing of airports by the State was considered as a general measure of economic policy, outside the scope of EU state aid rules.

In recent years, the EU airport industry has undergone fundamental changes, including an increasing interest from private investors, but also a change of public authorities' attitude towards private investment in airports. Whereas airports were previously mostly managed as infrastructures with a view to ensure accessibility and territorial development, they have in recent years defined commercial objectives and are competing with each other to attract air traffic.

In 2000, an EU General Court ruling reflected the changing nature of airports operation. In its "Aéroports de Paris" judgment, the Court stated that the operation of an airport, including the provision of airport services to airlines and service providers within airports, is an economic activity (case T-128/98). Before this judgment, public authorities could legitimately consider that financing measures in favour of airports did not constitute state aid in the meaning of the EU rules.

The Commission plans to adopt new guidelines on aviation – covering both airlines and the financing of airports - in 2013. Today's decision is part of over 60 on-going state aid investigations in the aviation sector.

The non-confidential version of the decision will be made available under the case number SA.23600 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.

Contacts :

Antoine Colombani (+32 2 297 45 13)

Maria Madrid Pina (+32 2 295 45 30)


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