Transport Airports

EU to Rule on Legality of Government Aid to 28 Airports and Ryanair

Feb 20, 2014 10:30 am

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Under new EU law, large airports in Europe would be prohibited from receiving government aid under most circumstances, and state aid to smaller airports would be gradually ended.

— Dennis Schaal

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David Precious  / flickr.com

Passengers disembarking from a Ryanair jet at Ireland West Knock Airport. David Precious / flickr.com


European Union regulators aim to rule by September whether state aid granted to 28 airports and budget airlines, such as Ryanair, is legal, the European Commission said on Thursday as it unveiled tougher laws to ban public funds for big airports.

The new rules replace 1994 and 2005 guidelines and specify whether and how much aid EU authorities can grant to the more than 460 airports across the 28-country bloc.

Critics say the aviation industry, which generates more than 140 billion euros ($193 billion) of the EU’s economic output, receives an average 3 billion euros in subsidies each year as authorities try to promote regional hubs and attract airlines to fly there.

“There are 28 pending cases. The cases under investigation will be decided under the new guidelines,” EU Competition Commissioner Joaquin Almunia told a news conference.

Airports under investigation include several in Germany, France, Austria, Italy, Sweden, Romania and Spain, with a number involving Ryanair , a Commission spokesman said.

The EU executive on Thursday closed four cases, saying no state aid was involved. These included financial incentives granted to Berlin Schoenefeld Airport, a marketing deal between Denmark’s Aarhus Airport and Ryanair, and investment aid for Marseille Provence Airport and Czech Ostrava airport.

Under the new rules, European airports that serve more than 5 million passengers a year will be banned from receiving state aid in future unless there is a clear market failure.

State aid for smaller airports with fewer than 3 million travelers will have to be phased out over a 10-year period. They will need to present a business plan to qualify for operating aid under the new guidelines.

The new rules will ensure a level playing field between airports and airlines, Almunia said in a statement.

“They will ensure fair competition regardless of the business model – from flag carriers to low-cost airlines and from regional airports to major hubs,” he said.

Green campaign groups said the new rules were too lax.

The new rules “not only legalize past subsidies, but also give a new blank cheque to airports and airlines that fail to boost local economies”, Bill Hemmings, aviation manager at Brussels-based Transport & Environment, said.

(Reporting by Foo Yun Chee; Editing by Dale Hudson)

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