14 May 2020

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State aid and transport

On 13 May 2020, the Commission adopted a working document describing state aid rules and public service obligations rules applicable to the air transport sector during the COVID-19 outbreak. The document provides useful guidance on which measures are considered as state aid and which are not.

Public remit services normally performed by the State in the exercise of its public powers such as operating special flights for the purpose of repatriation of nationals or transporting people for medical reasons do not constitute state aid if the beneficiary of the aid does not perform any economic activity.

Moreover, the imposition of a Public Service Obligation to air carriers to operate a route can be qualified as a Service of General Economic Interest and thus, not constitute state aid.

Member States need to clearly ensure that the four criteria of the Altmark judgment are fulfilled, by defining:

  • the essential route(s) to be maintained or in the case of airport infrastructure, the essential airport services;
  • the minimum required frequency (in terms of connections) and volumes (e.g. passenger capacity, of freight traffic) or, in the case of airport infrastructure, the quantity and quality of services to be maintained,
  • the necessity of the measure (severe and unforeseeable decrease in passenger, losses of passenger due to COVID),
  • the duration of the contract, which shall not exceed three to six months and should not extend beyond 31 December 2020.
  • ex ante financial parameters and control of overcompensation
  • the level of compensation paid which corresponds to the least cost to the community by choosing the air transport operator pursuant to a public procurement procedure.

On 13 May 2020, the Commission also adopted the Recommendation on vouchers offered to passengers and travellers as an alternative to reimbursement for cancelled package travel and transport services in the context of the COVID-19 pandemic.

Member States are encouraged to set up public schemes for guarantees on vouchers granted by operators in the travel and transport sector to ensure that consumers are reimbursed in case of insolvency of the issuer of the voucher. Those public guarantees constitute state aid since they provide an advantage to the travel operators in the form of liquidity relief.

The guarantees would not be covered by the scope of the Temporary Framework and must be notified by Member States directly under Article 107(3)(b) of the Treaty. The Commission already provided a template for the notification and would accept that the State guarantee covers up to 100% of the value of vouchers.