COVID-19: European Commission approves EUR 22.2 million Cypriot loan in favour of Hermes Airports Limited
By its decision of 18 November 2020, the European Commission approved a Cypriot aid scheme with a budget of EUR 22.2 million in favour of Hermes Airports Limited, the operator of Larnaka and Pafos international airports, which have been particularly affected by the COVID-19 crisis.
The scheme is based on the Temporary Framework on State aid, and more particularly on its chapter 3.3 concerning aid in the form of subsidised interest rates for loans. The purpose of the measure is to enable Hermes Airports Limited to have sufficient liquidity to meet its financial obligations and ensure the continuation of its operations.
The Commission considers that the aid granted to Hermes Airports Limited will help to limit the negative impact of the coronavirus crisis and to address the serious disturbance in the Cypriot economy, as Cypriot airports contribute significantly to the island's economy by ensuring connectivity for businesses and conveying tourists to the country.
The Commission therefore considered that the measure is in line with the conditions set out in the Temporary Framework. In particular, (i) the aid measure will be granted until the end of 2020, (ii) the maturity of the loan is six years, and (iii) the total amount of the loan does not exceed 25% of the total turnover of Hermes Airports Limited in 2019.
The Commission therefore concluded that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy, in line with Article 107(3)(b) TFEU and the conditions laid down in the Temporary Framework.
This measure must be linked to the Cypriot incentive scheme towards airlines approved on 1 July 2020 which allows airlines to benefit from a lump sum per passenger, variable according to the aircraft's load factor and capped at EUR 800,000 per company in accordance with the limited amount of the aid scheme based on the above mentioned Temporary Framework.
Aid schemes for airports approved by the European Commission are still few and far between, such as the aid scheme for German airports, the one concerning the Walloon airports, or that for Timisoara Airport. In view of the European Commission's decision to extend the Temporary Framework on State Aid until 30 June 2021 (with recapitalisation measures being implemented until 30 September 2021), other public support measures for airports will certainly be adopted, given the great need to support this sector, which is one of the most affected by the crisis.
