European Commission consultation on the revision of its State aid aviation guidelines

On 11 December 2024, the European Commission launched a public consultation on the targeted revision of the 2014 Guidelines on State aid to airports and airlines. The aim of the consultation is to gather comments from industry stakeholders on the application of the current Aviation Guidelines and the measures that should be adopted in the future. The consultation is open until 5 March 2025.

The current Guidelines set out the European Commission's interpretation of aid in the context of airport financing (e.g. assumption of the deficit, investment subsidies, etc.) and the incentives granted by airports to airlines. They also specify the conditions under which the European Commission can declare state aid in the aviation sector compatible with the internal market as a result of notifications from member states or Commission investigations on illegal aid initiated by the numerous complaints in this sector.

Thus, these Guidelines cover the following:

• the interpretation on the notion of state aid vis-à-vis public interventions for airports and airlines;
• the compatibility conditions for investment aid to airports with up to five million passengers per year;
• the compatibility conditions for operating aid to airports with up to three million passengers per year;
• the compatibility conditions for start-up aid to airlines for new routes at regional airports with up to five million passengers per year; and
• the compatibility conditions for social aid for certain categories of passenger.

The Aviation Guidelines were adopted for an unlimited period, with the exception of operating aid for airports with between 700,000 and three million passengers a year, available for a transitional period of ten years from 2014. Operating aid for airports with fewer than 700,000 passengers a year was to be evaluated after five years. In 2019, a study commissioned by the Commission revealed the structural lack of profitability of this category of airports. The European Commission has decided to extend the compatibility conditions of operating aid for these small regional airports for a further five years.

Following the COVID-19 pandemic and the period of health and travel restrictions that followed, the European aviation sector faced a major crisis. The energy crisis resulting from Russia's war of aggression against Ukraine had a further impact on the sector, notably by significantly increasing airport operators' energy costs. In particular, falling revenues and rising costs at regional airports have had a negative impact on profitability raising the risk of their closure, which would in turn negatively impact connectivity in the EU.

In view of these exceptional circumstances and the additional time needed to recover from the effects of the COVID-19 crisis, the Commission proposed a three-year extension of the transitional period initially set aside for the COVID-19 crisis provided for operating aid, with no further changes to the rules. The conditions of compatibility for operating aid laid down in the current Guidelines will therefore apply until April 2027. The other aid covered by these guidelines (i.e. investment aid for airports and start-up aid for new routes) are not subject to a transitional period.

All aid covered by the Guidelines, whether granted on an individual basis or as part of an aid scheme, must be reported to the European Commission before being granted. Investigations by the European Commission, however, whether following a complaint or launched on the Commission’s own initiative, will examine whether public funding constituting aid can be declared compatible with the conditions laid down in its Guidelines.

In practice, Member States have submitted few notifications on operating aid since the conditions of compatibility for operating aid are unrealistic and inadequate given the realities of the sector. For example, aid granted for a maximum of five years may not exceed 50% (for airports with between 700,000 and three million passengers per year) or 80% (for airports with fewer than 700,000 passengers per year) of the airport's average deficit over the period 2009 to 2013. The current relevance of this reference period is questionable.

Therefore, the Commission is now considering a review of its applicable framework in view of the evolution of the aviation sector, the prolongation of current measures, and the results of the 2020 state aid evaluation. Modifications are therefore necessary in the medium term to take these developments into account as well as the Commission's current priorities, notably green and digital transition policies, such as the "Clean Industrial Deal".

To this end, the Commission is organising a public consultation in the form of a questionnaire, enabling stakeholders and the broader public to express their views and participate in the review process. The aim is to inform the Commission on the changes to be considered, and on how to design new rules that are as efficient and effective as possible.

A call for contributions was launched in August 2024 to begin the revision process.

The new guidelines are scheduled for mid-2027.

Finally, it should be noted that the General Block Exemption Regulation, which allows states to grant aid without having to notify the European Commission in advance, includes investment aid for airports of up to three million passengers a year and operating aid for airports of up to 200,000 passengers a year, subject to simplified and more appropriate compatibility conditions. This Regulation will be in force until the end of 2026.