New guidelines on State Aid fall short of desired objectives
The Association of European Airlines warns that the new guidelines on State Aid for airports and airlines, announced by the European Commission last week, open the door to misuse of public resources. It is unacceptable that unprofitable airports can whitewash their past and continue to benefit from public funding for a period of no less than 10 years. This will further lead to unacceptable market distortion.
On 20 February the European Commission adopted their Guidelines on State Aid for Airports and Airlines, replacing those which have been in place for almost ten years. The current rules, whilst lacking in transparency, should nonetheless have regulated an area of clear market distortion; unfortunately they were never adequately implemented and many outstanding cases have so far gone unheard. AEA believes that the new guidelines will not serve industry, passengers and taxpayers any better.
AEA strongly disagrees with the provision in the latest formulation that permits operating aid – potentially very distortive to competition – for a transitional period of 10 years. An airport, building up its business route by route, should be able to demonstrate its viability within a much shorter time span.
It is also a matter of concern that the Commission allows airports to whitewash controversial operating financial support granted in the past. There is a risk that the retroactive application of the new Guidelines to all pending cases concerning operating aid supports players which for years have exceeded the existing rules, while penalising those who adhered to the existing legal framework at the time the state aid was granted. The new rules also make it clear that development assistance will never be granted on a route served by high-speed rail. AEA questions whether the reverse would also be the case, or whether the EU is happy to introduce a blatantly discriminatory rule into the statute books.
”In the EU internal market, state aid should only be granted if it does not limit competition or undermine a level playing-field”, said AEA’s CEO Athar Husain Khan. “We also call on the Commission to guarantee full transparency and enforcement in case of non-compliance.”