European Commission's public consultation on the extension of operating aid to regional airports

The European Commission has recently submitted for public consultation its draft communication extending the transitional period for operating aid that can be granted to regional airports under the 2014 Guidelines on State aid to airports and airlines. The Commission had already published a "call for contributions" on the extension of operating aid to regional airports in 2022 and received 26 contributions, which it published on its website. (Aviation guidelines – prolongation of operating aid to regional airports (COVID-19 response) (europa.eu))

The 2014 Guidelines on State aid to airports and airlines provide for a transitional period (in principle expiring in April 2024) for operating aid to airports with between 700,000 and 3,000,000 passengers per year. (2023 aviation guidelines (europa.eu))

Operating aid for airports with fewer than 700,000 passengers per year is subject to an evaluation by the Commission, which has not yet been completed. It should be noted that a study commissioned by the Commission in this regard in 2019 confirmed the structural lack of profitability in this category of airport.

The other categories of aid covered by these Guidelines, namely investment aid for airports and start-up aid for new routes, are not subject to a transitional period.

All aid provided for in the Guidelines, whether granted individually or as part of an aid scheme, must be notified in advance by Member States to the European Commission to be formally authorised before they can be granted.

Following the coronavirus pandemic, and in particular the ensuing health and travel restrictions, the European aviation sector has been dealing with a major setback. The energy crisis resulting from Russia's invasion of Ukraine has had a further impact on the sector, notably by significantly increasing the energy costs of airport operators. In particular, regional airports have faced declining revenues and rising costs, which have negatively impacted their profitability and could lead to their closure and negatively impact connectivity in the EU.

Given these exceptional circumstances and the additional time needed to recover from the effects of the COVID-19 crisis, the Commission proposes a three-year extension of the original transitional period, without making any further changes to the rules.

In order to respect the principle of proportionality, the Commission is extending the transitional period only to the extent necessary to ensure sufficient legal certainty until a full evaluation of the 2014 Guidelines can be considered.

The proposed extension does not represent a change in the Commission's policy on operating aid to regional airports as provided for in the Guidelines. The Guidelines’ conditions have never themselves been realistic and adequate given the realities faced by the sector as only part of the deficit may be covered by a subsidy. It should be remembered that the aid granted for a maximum of five years may not exceed 50% (for airports with between 700,000 and 3,000,000 passengers per year) or 80% (for airports with fewer than 700,000 passengers per year) of the average deficit of the airport concerned over the period 2009–2013. The relevance of this reference period is debatable.

Notwithstanding the conclusions of its 2019 study, mentioned above, the Commission still seems determined to limit operating aid in the future, and this initiative is merely a targeted response to the specific circumstances created by the COVID-19 pandemic.

This extension is the subject of a draft communication, which is currently undergoing public consultation open to interested parties until 5 June 2023. Member States, airports, airlines and industry associations are invited to contribute.

Finally, it is worth noting that the General Block Exemption Regulation, which allows Member States to grant aid without having to notify the European Commission in advance, includes investment aid for airports with a maximum of 3,000,000 passengers per year and operating aid for airports with a maximum of 200,000 passengers per year under simplified and more appropriate conditions of compatibility. This Regulation is in force until the end of 2026.