MEPs join forces to raise EU state aid limit on regional airports

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A group of lawmakers has called on the European Commission to raise the state aid threshold for regional airports, arguing they are “vital” to the local economy and create “thousands of direct and indirect jobs”. But green campaigners disagree entirely and back what they describe as a “balanced” set of rules.

French MEP Franck Proust (European People's Party) has taken the lead of a group of 53 European Parliament lawmakers opposed to the Commission's proposed reform of state aid rules for regional airports.

The group met the European Commission president, José Manuel Barroso, last week to “warn” him that the new state aid guidelines, presented last year, “would sacrifice a great number of regional airports on the altar of free competition”.

The group composed of 53 MEPs from all political groups – from France to Sweden, Croatia or Finland – who sent an open letter to the Commission in November expressing concern that the EU executive was “not taking into account” the Parliament's voice.

The French EU lawmaker calls for more flexibility on the part of the EU executive on operating aid for regional airports, which were prohibited under the existing state aid guidelines.

>> Read also: Revised EU state aid rules 'could lead to closure of 100 small airports'

The MEP wants the Commission to allow public financial support for all airports under 700,000 passengers per year, arguing that “a vast majority of small European airports fall in that category.” Despite an initial “sign of goodwill” from the Commission to adopt more flexible rules for airports under 500,000 passengers, Proust says little progress has been made.

“We’ve never seen the impact assessments of the Commission for the figures they came up with, we put a question to them but never got an answer. By raising the threshold to 700,000 passengers per year, we would save a majority of airports,” says Proust, who was elected in Nîmes, Southern France, where regional airports have mushroomed over the past years.

Some of them are barely ten kilometers away from each other, environmental groups say, but local politicians argue they are “vital” to the local economy, creating “thousands of direct and indirect jobs”.

Avoiding the “duplication of unprofitable airports” is also a concern at the heart of Competition Commissioner Joaquin Almunia’s proposals.

'No environmental constraints on aviation'

The NGO network Transport and Environment (T&E) is not opposed to subsidies for airports that have a real public mission, citing those situated in isolated areas where they support tourism and the economy, but it says the Commission should be careful about state aid for others.

“We want a level playing field across all transport modes. There are no fuel or VAT taxes on aviation, the emission trading scheme is being destroyed and at the same time we want to give subsidies to airports and airlines. The question is how will we meet environmental targets when CO2 emissions are hugely rising?” Aoife O’Leary, a policy officer at T&E, told EURACTIV.

However, in a pre-electoral period, employment considerations are all that matters.

“Employment is the priority,” Proust said. “I understand green campaigners but these airports bring economic activity and opens up otherwise landlocked regions,” he answered when asked about the environmental impact, adding that “those are two different issues”.

A transitional period of ten years is foreseen by the EU executive to give subsidised airports the time to become truly competitive, but for opponents of the projects “if they are not competitive now, they will not be in ten years time either”.

The disagreement is nowhere near to being settled: green campaigners are convinced that those airports could become competitive since “figures show that small airports who received state aid have grown into healthy airports and it is not up to taxpayers to subsidise them,” O’Leary said.

An obvious example is that of the “small regional” airport of Charleroi in Belgium, which has grown into an international hub attracting over 6 million passengers a year thanks to state aid and tax breaks which allowed low-cost carrier Ryanair to settle in.

However, "the tax argument is a false one”, O’Leary told EURACTIV, because the low-fare airline recently announced it would open new routes departing from the main Brussels airport, Zaventem, where taxes are ten times more expensive.

Rules could still change

For green campaigners, the Commission should stick to “balanced rules”, although the decision to allow certain subsidies for operating costs are considered a way to legalise formerly illegal aid that “went on for years” to a number of airports and airlines, since the Commission directorate in charge “did not enforce the existing guidelines”. It is rumored that former illegal aid will “probably” be declared legal retroactively.

The political pressure on the Commission to review its rules again and make them more flexible will be high ahead of 19 February when the new guidelines should be adopted.

After the meeting with MEP Proust, Barroso’s office sent EURACTIV a short comment saying that the president had listened to the MEP’s concerns and “stressed that the Commission had not taken its final decision yet”, leaving the door open to additional changes in the coming weeks.

Franck Proust will meet Commissioner Almunia next week. The Spaniard is embroiled in another dispute with a French minister over the EU executive's allegedly “radical views” on competition policy.

Air transport contributes significantly to the European economy, with more than 15 million flights per year, and a network of over 460 airports, providing work for some 2.3 million people.

Overall, airlines and airports contribute more than €140 billion to the EU's Gross Domestic Product.

Member States' public funding of airports and airlines is currently regualted by the 1994 and 2005 Aviation Guidelines.

The 1994 guidelines were adopted in the context of the liberalisation of the market for air transport services and contain provisions for assessing social and restructuring aid to airlines in order to provide a level playing field for air carriers.

They were complemented in 2005 by guidelines on the public financing of airports and on the start-up of airline services from regional airports.

Neither of the guidelines has an expiry clause, but in view of the significant market changes that have taken place in the last decade, the European Commission has initiated a review, with a first public consultation in 2011 aiming in particular to determine whether a revision is necessary (see IP/11/445).

  • 12 February: Meeting between Franck Proust and Joaquin Almunia
  • 19 February: New state aid for airports guidelines to be published

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