EU proposes to restrict airport state aid under revision of guidelines

European airport association claims new rules will limit smaller facilities’ access to vital support.

European regulators are aiming to revise guidance on state aid to air transport, which will limit funding assistance to larger airports and ban financial support for opening new routes.

Proposed measures, to replace guidelines set out in 2014, are being put forward for public consultation.

The European Commission says the revision has been drawn up because the sector has since undergone “significant transformation”.

“Continued growth, ambitious decarbonisation targets and challenges such as the Covid-19 pandemic and the energy crisis all call for a modernised approach to state-aid rules in the aviation industry,” it adds.

While operating aid will be possible for airports handling fewer than 1 million passengers annually, larger facilities are “expected to cover their own operating costs”, the Commission states.

Airports with fewer than 500,000 passengers have a limited effect on competition and the proposal will block-exempt aid for such facilities.

Those airports which lie between these thresholds are “large enough to be profitable”, says the Commission, but might need additional time to fully recovery from recent “external shocks”, including the pandemic.

Its proposal includes allowing operating aid for these airports over a five-year transition period.

Larger facilities will face restrictions on investment aid, with the upper qualifying limit on passenger numbers cut from 5 million to 3 million.

The measures also feature a “more straightforward” analysis on the potentially distortive effects of state aid on neighbouring airports, says the Commission.

“This analysis would cover effects of state aid in a larger geographic area around the airport receiving the aid,” it adds.

Start-up aid to open new routes — which was “very rarely used”, says the regulator — will “no longer be allowed”. The Commission points out that the air transport sector has demonstrated that it does not need to depend on such support.

“In a fully EU liberalised air transport market, air carriers are expected to shoulder the risk of opening new routes,” it adds.

Adoption of the revised guidelines is intended in the first quarter of next year.

While the consultation runs to 11 June, airports association ACI Europe is already claiming the proposal will need revision.

It says the draft raises a number of preliminary concerns, including the five-year limitation for some smaller airports. ACI Europe says this will “significantly restrict” access to vital support.

“There are clearly worrying inconsistencies between ascertained economic and market realities – which the current oil crisis is just further exposing – stated policy objectives, and the proposed new state aid framework for airports,” says director general Olivier Jankovec.

“Addressing these shortcomings will be essential, as the final guidelines will largely determine the future connectivity of Europe’s regions and smaller communities – and by extension their attractiveness, economic resilience and long-term development.”