European Commission’s green light to €14.3 million Croatian compensation in favour of Zagreb International Airport in the context of the coronavirus crisis
The Croatian authorities, which we assisted in the preparation of the file, notified in August 2022 to the European Commission, a measure aimed at partially compensating the damage suffered by the operator of Zagreb International Airport because of the coronavirus pandemic. The period covered by the compensation is 19 March until 30 June 2020,during which travel restrictions were imposed by Croatia and other countries to limit the spread of the virus. As a result, Zagreb International Airport experienced a steep decline in traffic, which resulted in major revenue losses.
The compensation, which takes the form of a write-off of the concession fees, amounts to €14.3 million (approximately HRK 107.9 million).
The European Commission assessed this Croatian support measure under Article 107.2, b) of the Treaty on the Functioning of the European Union ("TFEU"), which allows the Commission to declare compatible with the internal market "aid to make good the damage caused by natural disasters or exceptional occurrences". In this respect, the Commission considers that the coronavirus pandemic constitutes an "exceptional occurrence" because of its exceptional and unpredictable nature and its significant impact on the economy.
The Commission found that the measure will compensate damage that is directly linked to the COVID-19 pandemic. The Commission also found that the measure is proportionate as the compensation does not exceed what is necessary to make good the damage.
On this basis, the Commission concluded that the Croatian measure is in line with EU State aid rules.Clearly, this authorisation follows the generally favourable approach of the European Commission towards State aid to help the aviation industry in the context of the pandemic. Many airlines, such as Croatian Airlines, Air Belgium, SAS, Finnair, Condor, Blue Air, Alitalia, TAROM and even Aegean Airlines, have received State aid measures on the basis of Article 107.2, b) of the TFEU for the damage they suffered as a result of the pandemic, as well as several airport operators in Italy, Romania and Greece and ground-handler Aviapartner.
Contrary to the Temporary Framework to support the economy in the context of the coronavirus pandemic that expired on 30 June 2022, aid under Article 107.2, b) of the TFEU is not subject to a specific deadline to be notified to the European Commission and granted to the beneficiaries.
