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Commission approves €800 million Italian scheme to compensate airports and ground-handling operators for the damage suffered due to the coronavirus outbreak

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The European Commission has approved, under EU state aid rules, an €800 million Italian scheme to compensate airports and ground-handling operators for the damage suffered due to the coronavirus outbreak and the travel restrictions that Italy and other countries had to implement to limit the spread of the virus.

Executive Vice President Margrethe Vestager in charge of competition policy said: "Airports are among the companies that have been hit particularly hard by the coronavirus outbreak. This €800 million scheme will enable Italy to compensate them for the damage suffered as a direct result of the travel restrictions that Italy and other countries had to implement to limit the spread of the virus. We continue working in close cooperation with member states to find workable solutions to mitigate the economic impact of the coronavirus outbreak, in line with EU rules.”

The Italian scheme

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Italy notified to the Commission an aid measure to compensate airports and ground-handling operators for the damage suffered during the period between 1 March and 14 July 2020 due to the coronavirus outbreak and the travel restrictions in place.

Under the scheme, the aid will take the form of direct grants. The measure will be open to all airports and ground-handling operators with a valid operating certificate delivered by the Italian civil aviation authority.

A claw-back mechanism will ensure that any public support received by the beneficiaries in excess to the actual damage suffered will have to be paid back to the Italian State.  

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The Commission assessed the measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union (TFEU), which enables the Commission to approve State aid measures granted by member states to compensate specific companies or specific sectors for the damages directly caused by exceptional occurrences, such as the coronavirus outbreak.

The Commission considers that the coronavirus outbreak qualifies as an exceptional occurrence, as it is an extraordinary, unforeseeable event having a significant economic impact. As a result, exceptional interventions by the member states to compensate for the damages linked to the outbreak are justified. 

The Commission found that the Italian measure will compensate damages that are directly linked to the coronavirus outbreak, and that it is proportionate, as the compensation will not exceed what is necessary to make good the damage, in line with Article 107(2)(b) TFEU.

On this basis, the Commission approved the measure under EU state aid rules.

Background

Financial support from EU or national funds granted to health services or other public services to tackle the coronavirus situation falls outside the scope of State aid control. The same applies to any public financial support given directly to citizens. Similarly, public support measures that are available to all companies such as for example wage subsidies and suspension of payments of corporate and value added taxes or social contributions do not fall under State aid control and do not require the Commission's approval under EU State aid rules. In all these cases, member states can act immediately.

When State aid rules are applicable, member states can design ample aid measures to support specific companies or sectors suffering from the consequences of the coronavirus outbreak in line with the existing EU State aid framework.

On 13 March 2020, the Commission adopted a Communication on a co-ordinated economic response to the COVID-19 outbreak setting out these possibilities.

In this respect, for example:

  • Member states can compensate specific companies or specific sectors (in the form of schemes) for the damage suffered due and directly caused by exceptional occurrences, such as those caused by the coronavirus outbreak. This is foreseen by Article 107(2)(b)TFEU.
  • State aid rules based on Article 107(3)(c) TFEU enable member states to help companies cope with liquidity shortages and needing urgent rescue aid.
  • This can be complemented by a variety of additional measures, such as under the de minimis Regulation and the General Block Exemption Regulation, which can also be put in place by Member States immediately, without involvement of the Commission.

In case of particularly severe economic situations, such as the one currently faced by all member states due the coronavirus outbreak, EU State aid rules allow member states to grant support to remedy a serious disturbance to their economy. This is foreseen by Article 107(3)(b) TFEU of the Treaty on the Functioning of the European Union.

On 19 March 2020, the Commission adopted a State Aid Temporary Framework based on Article 107(3)(b) TFEU to enable Member States to use the full flexibility foreseen under State aid rules to support the economy in the context of the coronavirus outbreak. The Temporary Framework, as amended on 3 April, 8 May, 29 June, 13 October 2020 and 28 January 2021, provides for the following types of aid, which can be granted by member states: (i) Direct grants, equity injections, selective tax advantages and advance payments; (ii) State guarantees for loans taken by companies; (iii) Subsidised public loans to companies, including subordinated loans; (iv) Safeguards for banks that channel State aid to the real economy; (v) Public short-term export credit insurance;(vi) Support for coronavirus related research and development (R&D); (vii) Support for the construction and upscaling of testing facilities; (viii) Support for the production of products relevant to tackle the coronavirus outbreak; (ix) Targeted support in the form of deferral of tax payments and/or suspensions of social security contributions; (x) Targeted support in the form of wage subsidies for employees; (xi) Targeted support in the form of equity and/or hybrid capital instruments; (xii) Support for uncovered fixed costs for companies facing a decline in turnover in the context of the coronavirus outbreak.

The Temporary Framework will be in place until the end of December 2021. With a view to ensuring legal certainty, the Commission will assess before this date if it needs to be extended.

The non-confidential version of the decision will be made available under the case number SA.63074 in the state aid register on the Commission's 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 Competition Weekly e-News.

More information on the Temporary Framework and other action the Commission has taken to address the economic impact of the coronavirus pandemic can be found here.

Aviation/airlines

Technology take off for leading airline

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A leading airline is pioneering high-tech solutions to ensure passengers stay safe and healthy.

Emirates has tapped on its partnership with the UAE’s Aviation X-lab innovation incubator programme to pilot robot cleaning trials.

These are currently in use at its signature lounges at Dubai airport. The robots use special technology to eliminate most viruses and, according to a spokesman for the airline, “ensure a healthier environment.”

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The spokesman said, “All our bio-safety protocols are continually reviewed and updated in line with the latest medical guidance.”

Some of the efforts the airline has made to respond to the ongoing health pandemic were outlined at a press conference in Brussels by Emirates Belux country manager, Jean-Pierre Martin.

In addition to being one of the first airlines to roll-out PPEs (personal protection equipment) for its frontline employees back in February 2020, when COVID-19 vaccines became available, the company has also implemented a campaign to encourage employees to protect themselves and others.

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This has resulted in over 95% of all employees being fully vaccinated.

The airline has also been a forerunner in adopting digital verification solutions for travel, from adopting the IATA Travel Pass to partnering with the UAE health authorities to enable seamless digital checks for COVID-19 travel documentation.

These projects deliver multiple benefits from better customer experiences to the reduced use of paper, and improved efficiency and reliability in travel document checks.

Emirates was one of the first airlines to sign up for IATA’s Travel Pass in April and currently offers this convenience to customers fly between Dubai and 10 cities, with plans to expand the service across its network as IATA continues to expand and secure service providers in more markets. By October, the airline would have extended the implementation of IATA Travel Pass for customers at all of its destinations.

The spokesman added, “Throughout the past year, Emirates has worked closely with the authorities and its aviation partners to ensure the health and safety all travellers and employees at the airport, even as health protocols continually evolved across the world.”

“Even before the World Health Organisation officially declared COVID-19 a pandemic,we had already implemented enhanced cleaning and disinfection protocols at all our customer touchpoints at the airport and onboard. At the airport, we have installed protective shields at all check-in counters and implemented physical distancing in all areas.”

He said that teams on the ground collect and verify the latest entry requirements for each destination. The company’s COVID-19 info hub is also updated at least once daily, adding, “this has become one of the top authoritative sources of information for travellers.”

The company is also utilizing technology in other areas.

In 2019, the company began testing and implementing biometric technology at various customer journey touchpoints at the airport. In the past year, the airline fast-tracked its biometric technology roll-out and today, it has over 30 biometric cameras in active operation at its Dubai airport hub, including at check-in counters, at the entrances of its First and Business Class lounges, and select boarding gates.

Since implementation, over 58,000 customers have used this convenient, contactless and secure verification option to access its lounge, and more than 380,000 customers have used biometric gates to board their flight.

Its new self-service check-in and bag drop kiosks have seen increasing usage since its introduction in September 2020. In July and August alone, over 568,000 customers used this service which enabled them to skip queuing at the counter.

The company has also introduced new technology to make it easier for customers to report delayed or damaged bags.

Over the summer travel months of July and August,the airline handled nearly 1.2 million customers at its hub, compared to 402,000 customers during the same period in 2020, highlighting the safe and smooth resumption of international travel to and through Dubai. In fact, in 2020, it was the largest international airline carrying over 15.8 million passengers, according to IATA’s latest World Air Transport Statistics 2021.

Since Dubai re-opened to international visitors, Emirates has gradually restored its network and flight schedules from just a handful of cities in July 2020 to over 120 destinations today, with more flights to be layered onto more than 20 Emirates routes by October.

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Aviation/airlines

Kazakhstan orders two heavy-lift transport aircrafts from Airbus

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Negotiations between the Minister of Industry and Infrastructure Development of the Republic of Kazakhstan Beibut Atamkulov with AIRBUS Vice President Alberto Gutierrez ended with the signing of a contract for the purchase of two A400M aircrafts (pictured) for the needs of the Ministry of Defense of Kazakhstan.

The Airbus A400M heavy-lift military transport aircraft is capable of performing military, civilian humanitarian air transportation missions, and is effective for organising a rapid response in emergency situations.

The contract to supply Airbus A400M includes an array of services for personnel training and technical support.

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The delivery of the first aircraft is scheduled for 2024. Kazakhstan becomes the world’s ninth country to use this type of aircraft, along with Germany, France, the United Kingdom, Spain, Turkey, Belgium, Malaysia and Luxembourg.

The participants of the meeting also discussed the course of preparation for the establishment of a Service and Repair Centre for military and civil AIRBUS aircrafts at the Kazakhstan Aviation Industry LLP base. Following the talks, the parties signed a Memorandum of Understanding and Cooperation.

“Cooperation with AIRBUS and the creation in Kazakhstan of a certified Service and Repair Centre for military and civil aircrafts produced by AIRBUS is a large-scale and mutually beneficial project with long-term prospects. The service centre will be able to cover the entire Central Asian region”, Beibut Atamkulov noted.

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AIRBUS D&S specialists are expected to arrive in September this year to conduct a technical audit of the capabilities of Kazakhstan Aviation Industry LLP.

The A400M is the most versatile aircraft available today, which meets the most diverse needs of the global air force and other organizations in the 21st century. It can perform three very different types of tasks: tactical airlift missions, strategic airlift missions, and serve as a tanker. Equipped with four unique Europrop International (EPI) TP400 turboprop engines operating in opposite directions, the A400M offers a wide flight range in both speed and altitude. It is the ideal aircraft to meet the diverse requirements of countries in terms of military and humanitarian missions for the benefit of society.

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Aviation Strategy for Europe

Single European Sky: Lowering emissions and reducing delays

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MEPs want to modernize the EU's airspace management to make it more efficient and greener, Society.

Updating Single European Sky rules should help the aviation sector become more efficient, ensuring shorter flights through more direct routes and thus lowering greenhouse gas emissions, say MEPs.

The Single European Sky initiative was launched in 1999, in a period marked by a large increase in flights and growing delays that highlighted the need for better coordination.

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MEPs want the rules to be reformed to make EU airspace less fragmented and improve air traffic management. This would  increase safety and efficiency, lower costs and benefit the environment.

Currently, airlines may not fly directly to the landing point. They may want to avoid flying over states with higher charges, avoid military zones or take a longer route to avoid the weather. That can mean longer flights and more emissions. Fragmentation can also cause delays due to less-than-optimal coordination.

MEPs say airspace management rules need to be further developed and adapted to evolving markets, the new digital environment and the European Green Deal. They are pushing for new rules that would help achieve up to a 10% reduction in greenhouse gas emissions, by avoiding longer routes and promoting cleaner technologies.

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They also want to make European airspace more competitive and support choosing air-traffic service providers and other air navigation services such as communication and meteorological services through competitive tenders.

Background

Current Single European Sky rules date from 2009. The European Commission proposed a revision in 2013 that was adopted by Parliament in 2014. Following the failure of the Council to reachan  agreement, the Commission proposed an upgrade in line with the European Green Deal in 2020.

On 17 June 2021, Parliament's transport and tourism committee updated their negotiating mandate on the Single European Sky reform and adopted their position on expanding the mandate of the European Union Aviation Safety Agency to act as a performance review body. After the latter position was announced during the July plenary session, MEPs are ready for negotiations with the Council.

Find out more 

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