State aid: The European Commission approves an Italian aid scheme for the launch of new air routes at Calabrian airports

On 15 January 2024, the European Commission approved a EUR 120 million Italian aid scheme for all airlines establishing new connections between one of the three airports in Calabria, namely Tito Minniti Airport, Lamezia Terme Sant’Eufemia Airport and Crotone-Sant’Anna Airport, and another airport in the EU. These airports had already been subject to a Commission decision for a similar scheme in 2017. This scheme, for the period 2017 to 2022 and implemented through project proposals, did not achieve the expected success.

The new scheme also aims to encourage the establishment of new air passenger connections linking Calabria’s airports, with the goal of enhancing the region’s connectivity and improving residents’ mobility. This aid scheme, granted over three years in the form of subsidies, will cover up to 50% of the cost of airport charges incurred by each beneficiary for any new established air route until 27 March 2027. Moreover, the category of aid may include the cost of airport charges for both served airports as well as costs related to ground-handling services.

Following the conditions set out in its guidelines for this aid category, the Commission has reviewed the proposed scheme by Italian authorities.

• The aid measure must contribute to a well-defined common interest objective: The Commission concluded that the aid scheme meets the common interest objective of opening up the Calabria region, thereby increasing residents’ mobility.
•  The aid measure needs State intervention: The Commission concluded that, without Italian public support, airlines would not undertake the necessary investments to establish new air routes in this region.
•  The aid must be appropriate: The Commission concluded that the aid constitutes an appropriate intervention tool to address this market failure.
•  The aid must have an incentive effect: The Commission concluded that the aid scheme incentivises airlines to develop new air routes in this region, which they probably would not have done without subsidies due to the significant cost of these investments.
•  The aid must be proportionate (aid limited to the minimum): The Commission concluded that the scheme is proportionate since the aid is limited to the minimum necessary to encourage the establishment of new air routes in the Calabria region.
•  Unintended negative effects on competition and exchanges between Member States must be anticipated: The Commission concluded that, as the aid scheme is limited to the minimum necessary, its impact on competition and trade within the EU will be limited.
•  The aid must be granted transparently: The Commission concluded that this subsidy-based aid scheme is transparent, as it is open to all airlines, provided they establish new connections from and to Calabria.

Therefore, the Commission concluded that the Italian State aid scheme complies with European rules on State aid.

In the past, the European Commission approved similar schemes for airports such as Ancona, Maastricht, Tulcea, Oradea, Comiso, the Canaries and, recently, Pierrefonds. Some countries notified a general framework scheme applicable to all their airports, avoiding individual notifications for specific ones. This was the case for France, the UK and Lithuania.

This kind of support is rare considering the total number of airports, mainly due to widespread discounts on the cost of airport charges offered by the airports themselves. These discounts are not considered State aid since they are open to all airlines under the same conditions and therefore are not selective.

The Commission has also announced a public consultation for reforming this aid category when the guidelines expire in 2026.