The European Commission has approved, under EU state aid rules, a €26 million Irish aid scheme to compensate airport operators for the losses caused by the coronavirus outbreak and the travel restrictions imposed by Ireland to limit the spread of the coronavirus. The aid consists of three measures: (i) a damage compensation measure; (ii) an aid measure to support the airport operators up to a maximum of €1.8 million per beneficiary; and (iii) an aid measure to support the uncovered fixed costs of these companies.
The aid will take the form of direct grants. In case of support for the uncovered fixed costs, aid can also be granted in the form of guarantees and loans. The damage compensation measure will be open to operators of Irish airports that handled more than 1 million passengers in 2019. Under this measure, these operators can be compensated for the net losses suffered during the period between 1 April and 30 June 2020 as a result of the restrictive measures implemented by the Irish authorities in order to contain the spread of coronavirus.
The Commission assessed the first measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union and found that it will provide compensation for damage that is directly linked to the coronavirus outbreak. It also found that the measure is proportionate, as the compensation does not exceed what is necessary to make good the damage. With regard to the other two measures, the Commission found that they are in line with the conditions set out in the state aid Temporary Framework. In particular, the aid (i) will be granted no later than 31 December 2021 and (ii) will not exceed €1.8 million per beneficiary under the second measure and will not exceed €10 million per beneficiary under the third measure.
The Commission concluded that both measures are necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a member state, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. On this basis, the Commission approved the three measures under EU State aid rules. More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here. The non-confidential version of the decision will be made available under the case number SA.59709 in the state aid register on the Commission's competition website once any confidentiality issues have been resolved.
Aviation: Commission proposal on airport slots offers much-needed relief to sector
The European Commission has adopted a new proposal on slot allocation that grants aviation stakeholders much-needed relief from airport slot use requirements for the summer 2021 scheduling season. While airlines normally have to use 80% of the slots awarded to them to secure their full slot portfolios for subsequent scheduling seasons, the proposal reduces this threshold to 40%. It also introduces a number of conditions aimed at ensuring airport capacity is used efficiently and without harming competition during the COVID-19 recovery period.
Transport Commissioner Adina Vălean said: “With today's proposal we seek to strike a balance between the need to provide relief to airlines, which continue to suffer from the significant drop in air travel due to the ongoing pandemic and the need to maintain competition in the market, ensure an efficient operation of airports, and avoid ghost flights. The proposed rules provide certainty for the summer season 2021 and ensure that the Commission can modulate further necessary slot waivers according to clear conditions to ensure this balance is maintained.”
Looking at the traffic forecasts for summer 2021, it is reasonable to expect that traffic levels will be at least 50% of 2019 levels. A threshold of 40% will therefore guarantee a certain level of service, while still allowing airlines a buffer in the use of their slots. The proposal on slot allocation has been transmitted to the European Parliament and Council for approval.
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