Finnish State investment aid for Vaasa airport infrastructure modernisation in line with EU state aid rules

Brussels, 3-7-2013 — /europawire.eu/ — The European Commission has found Finnish plans to grant an investment aid of €320 000 to modernise and enhance the infrastructure of Vaasa airport, on the West coast of Finland, to be in line with EU state aid rules. In particular, the project will improve regional connectivity without unduly distorting competition in the internal market. Vaasa is a small regional airport, with less than 500 000 passengers per year. The project aims at meeting increasing demand from airlines and passengers.

Commission Vice-President in charge of competition policy Joaquín Almunia said: “Local airports are important for the accessibility of a region and the development of local business. Currently, even small aid amounts for financing airport infrastructure need to be notified to the Commission. I propose to greatly facilitate the granting of support for small airports in the next guidelines on state aid to the aviation sector which will adopt around the beginning of next year.”

In May 2013, the Finnish authorities notified plans to support the modernisation of Vaasa airport. The Commission examined the project under its 2005 guidelines on state aid to the aviation sector. The Commission’s investigation showed that the infrastructure project contributes to an objective of common European interest by improving the connectivity of the region.

Moreover, the Finnish authorities demonstrated on the basis of an ex ante business plan that the public subsidies are necessary and proportional. In particular, the public funding is limited to bridging the funding gap and the airport operator contributes to an important extent (more than 60% of the total investment costs) to the financing of the project. In its assessment, the Commission took into account the important role of this regional airport for the accessibility of West Finland, reaching a balance between fair conditions of competition in the aviation industry and transport needs.

Background

Vaasa airport is owned and operated by Finavia Oyj, a limited liability company fully owned by the Finnish State. It currently serves around 350 000 passengers per year. The two closest airports, Pori and Pietarsaari-Kokkola, (respectively 193 and 120 km from Vaasa) are around 2 hours travelling time away.

Smaller EU airports display the greatest proportion of public ownership and most often rely on public support. Certain regions are still hampered by poor accessibility from the rest of the EU, and major hubs are facing increasing levels of congestion. Regional airports play an important role in ensuring the accessibility of Europe’s regions and in the decongestion of hub airports.

Against this backdrop, the Commission’s aim is to establish more equitable conditions of competition in the aviation sector while, at the same time, allowing regional authorities to meet accessibility and transport needs. The application of state aid rules to the aviation sector constitutes part of the Commission’s efforts aimed at improving the competitiveness and growth potential of EU airports and airlines. In order to further reduce the administrative burden, the Commission proposes to introduce in the next Aviation Guidelines a set of criteria under which Member States could support small airports without other airports in their proximity. On the basis of these criteria, Member States could design funding schemes to be approved by the Commission. Projects that meet the criteria of an approved scheme could then be funded without further Commission intervention. On 3 July 2013, the Commission will launch a public consultation on draft new guidelines.

Today’s decision is part of around 60 on-going cases in the aviation sector concerning the financing of airport infrastructure and operation as well as airport/airline arrangements.

The non-confidential version of the decision will be made available under the case number SA.35378 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.