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

Thursday, 14 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.

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also received a complaint about a Dutch air passenger tax in force between 1 July 2008 and 30 June 2009 when it was repealed.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.