State aid: Commission opens in-depth investigation into compensation for Sardinian airports

Brussels, 25-1-2013 — /europawire.eu/ — The European Commission has opened an in-depth investigation to examine whether an Italian scheme granting financial support to certain airport operators in Sardinia and the air carriers operating in these airports is in line with EU state aid rules. At this stage, the Commission has concerns that such public support may procure the beneficiaries an undue economic advantage that their competitors do not have. The opening of an in-depth investigation gives interested third parties an opportunity to submit comments on the measures under assessment; it does not prejudge the outcome of the investigation.

In November 2011, Italy notified a compensation scheme aimed at improving air transport services between Sardinia and the European and Italian mainland, notably outside peak holiday periods. Under the scheme, airport operators are compensated for selecting airlines that are able to meet certain annual targets, i.e. frequencies and passenger volume on given “strategic” routes. In turn, selected airlines are granted financial contributions from the respective airports for delivering these services. The scheme foresees selection of airlines through a tender. According to the notification, the scheme was designed to apply in 2012 and 2013.

The Commission takes the preliminary view that the scheme has already been implemented, in breach of the standstill obligation in Article 107 of the Treaty on the Functioning of the European Union (TFEU) that requires Member States to get Commission approval before implementing state aid projects. Indeed, the scheme is laid down in a regional law of 2010 and implementing acts have been adopted thereafter. As of 2010, the airports of Alghero, Cagliari and Olbia have received advance payments of the compensation assigned to them, through loans granted by the financial branch of the Sardinian Region. These airports have, in turn, paid financial contributions to air carriers, including Ryanair, for the transport services operated in the respective airports. No tender has been carried out for the selection of airlines.

Italy contends that the compensation is intended to remunerate airports for the discharge of a public service obligation in relation to air transport from and to the island. However, the Commission has doubts that the compensation to airports meets the criteria of the EU rules on services of general economic interest (SGEI), in particular criteria regarding a clear definition of the public service remit and the selection of the service at the least cost. Moreover, the Commission has doubts whether the measure in favour of air carriers complies with the specific state aid rules for the aviation sector, in conjunction with SGEI rules, and invites Italy to submit elements for a full assessment in this respect.

The Commission will now investigate to either confirm or infirm these doubts. Member States and interested third parties may submit comments within one month from publication of today’s decision in the EU’s Official Journal.

Background

The Commission is currently conducting another state aid investigation concerning a Sardinian airport, namely Alghero (case SA.23098), as well as several investigations in the air transport sector in different Member States (see IP/12/698 and IP/12/833).

The Commission is currently reviewing its 2005 guidelines on state aid to airlines and airports. A first public consultation took place in April 2011 (see IP/11/445). After analysing the submissions, the Commission is currently reflecting on revised guidelines and will publish a draft text for public consultation in the coming months.

More information is available under the case number SA.33983 in the State Aid Register on the DG Competition website. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.