EU crack down on state aid to airports

8th February 2005, Comments 0 comments

8 February 2005, BRUSSELS - The European Commission is to tighten rules on state aid for regional airports used by low cost airlines but will not impose a blanket ban.

8 February 2005

BRUSSELS - The European Commission is to tighten rules on state aid for regional airports used by low cost airlines but will not impose a blanket ban.

The move follows last year's controversial ruling that Irish budget carrier Ryanair pay back millions of euros of subsidies to Charleroi airport in Southern Belgium.

"Steps need to be taken to promote the regional airports and the development of new air services in Europe," said EU Transport Chief Jacques Barrot.

"At the same time, everything must be done to ensure equality of treatment between companies and between airports."

Ryanair protested the EU decision last year arguing it would have implications for other 'no frills' airlines who benefit from state money for using small regional airports.

But the draft Commission paper, leaked to the Financial Times, stresses that there will not be an outright ban on state aid.

It says that "the payment of state aid to airlines, whether or not this aid is paid through the airports, can under certain conditions be a necessary means of attracting the passenger volumes" that are necessary to keep an airport open.

In principle, support should be given only for airlines flying from regional airports that have less than five million passengers a year.

This would only be permitted if the airport was not serviced by another airline or high speed rail link.

A limit of five years and ceiling of 50 percent of the operating costs would also be set.

The Commission paper will form the basis of binding guidelines later this year, and has been opened for consultation with interested parties.

[Copyright Expatica 2005]

Subject: Belgian, German news

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