European Commission approves state aid for the construction of French airport at Notre-Dame-des-Landes

There are plans for a new airport for Nantes, in western France, to be built some 12 miles to the north of the town, at Notre Dame des Landes. The new airport has been fiercely opposed. The proponents of the new airport claim the existing one is now full, with over 3.5 million passengers, and planes over-fly Nantes. The European Commission has decided that it is suitable to give a public subsidy of €150 million to the company to develop the new airport, Société Aéroports du Grand Ouest. The EC says this is compatible with the EU rules on State aid, and they say it will help improve regional connectivity and links with the rest of the EU, without unduly distorting competition in the internal market. This appears to be a very bad decision on the use of public money. The Commission seems to have believed everything it has been told by the authorities who want to build the airport. There is, in reality, no congestion at the existing airport and the economic benefits were hotly challenged in a report by CE Delft, commissioned by the local campaign. It is also worrying that the Commission is agreeing to State Aid for an airport in what is generally quite a wealthy area.
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State aid: Commission approves aid for the construction of French airport Notre-Dame-des-Landes

Brussels.

20.11.2013 (Europa)

The European Commission considers that the public subsidy granted by France to Société Aéroports du Grand Ouest, a company situated in Nantes in western France, for the construction of the Notre-Dame-des-Landes Airport, is compatible with the EU rules on State aid. The project will help improve regional connectivity without unduly distorting competition in the internal market.

The Aéroport du Grand Ouest project will relocate Nantes Atlantique Airport, situated near the city of Nantes, to the site of Notre-Dame-des-Landes, a little over 20 km to the north of Nantes. The main aim of the project is to meet regional development requirements and to resolve the congestion problem at the existing airport. Following the tender procedure, the contract for implementing the project was awarded to Société Aéroports du Grand Ouest, a subsidiary of the Vinci group.

The French authorities notified a subsidy of EUR €150 million to the Commission in July 2013. The Commission assessed the measure in the light of the EU guidelines for State aid in the aviation sector, adopted in 2005. The investigation carried out by the Commission showed that the infrastructure project helped achieve an objective of common interest by tackling the congestion of the existing infrastructure. Furthermore, the French authorities presented a business plan for the project, which showed that the public subsidy was necessary to implement the project and in proportion to the objective pursued.

The assessment of the measure in question in accordance with State aid legislation is without prejudice to the procedure currently under way to ensure that the project complies with European environmental law.

nantes airport

Current airport some 3 miles south west of Nantes. Proposed site of new airport at Notre Dame des Landes, some 12 miles north west.

Background

Nantes Atlantique Airport is located some ten kilometres from the city of Nantes. Over the last five years its passenger traffic has risen by 40%, reaching a total of 3 631 693 passengers in 2012, compared with the airport’s estimated annual capacity of 3 500 000 passengers. The nearest airports (Rennes, Angers, Vannes) are mainly national in scope and/or do not allow for the development of aeronautical infrastructure.

Certain regions are hampered by poor accessibility from the rest of the European Union, and the major hubs are facing increasing levels of congestion. Regional airports play an important role in ensuring the accessibility of Europe’s regions. Against this backdrop, the Commission’s aim is to establish more equitable conditions of competition in the aviation sector, while at the same time allowing regional authorities to meet accessibility and transport needs. The application of State aid rules to the aviation sector is part of the Commission’s efforts to improve the competitiveness and growth potential of the European Union air transport sector. The European Commission has launched a procedure to revise the current rules (seeIP/13/644).

Today’s decision concerns one of around 60 on-going cases in the aviation sector relating to the financing of airport infrastructure and operations and airport/airline agreements.

The non-confidential version of the decision will be made available under the case number SA.37125 in the State Aid Register on the DG Competition website, once any confidentiality issues have been resolved.

New publications of State aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

http://europa.eu/rapid/press-release_IP-13-1125_en.htm

Nantes area map airports

Map showing location of airports in the area from http://www.mapsofworld.com/international-airports/europe/france.html

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Earlier:

Consultation on rules for European Commission state aid to airports and airlines

18.9.2013Under the European Commission, state aid is granted to various sectors of the economy. However, a key issue is the impact it has on distorting the market, and giving an unfair advantage to those companies or organisations receiving it. Airports and airlines are one sector that receives large amounts of state aid through the EC. The Commission’s DG Competition is tasked with overseeing state aid. There have been earlier sets of guidelines on state aid to airports and airlines, but there is a current consultation – due to end on 25th September (which may be extended). The exact amount of state aid given to the aviation sector is somewhat shady, but is at least €3 billion, for those subsidies that are fully notified.There have been widely publicised cases, such as that of Ryanair at Charleroi airport. Transport & Environment have produced an easy-to-read briefing on the state aid situation, and people are urged to respond to the consultation. The state aid gives the aviation industry unmerited subsidy, and helps to encourage very high carbon travel.http://www.airportwatch.org.uk/?p=17424

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Economist: Proposed EU rules on state aid aim to stem the flow of money from taxpayers’ pockets to Ryanair

18.10.2013Article in the Economist gives a useful set of insights into airport subsidies at small airports across Europe, which are now due to be reduced after consultation. The Economist says Europe has over 450 airports, mostly small and loss-making. About 85% are publicly owned. Local politicians’ enthusiastic sponsorship of airports, to boost regional economies, has in turn contributed to the rapid growth of low-cost airlines, since the airports have used their subsidies to offer cheap landing fees and other sweeteners to persuade the cheap carriers to fly there.  Ryanair is the sole or dominant carrier at many of the airports under investigation, and has been getting effective subsidies of as much as €11 per passenger. There may be as much as €3 billion of taxpayers’ money given in EU-approved aid to small airports each year, and more that is not sanctioned.  EU laws ban state aid if it seriously distorts markets and though there have been many investigations into this, none has yet reached a conclusion. Some smaller airports will find it hard to pay Ryanair and other budget airlines enough to keep them flying there. With tighter rules, some of the 80-odd European airports with under 1m passengers will be at risk of closing.http://www.airportwatch.org.uk/?p=18014

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Bankrupt Alitalia to get € millions of state aid from Italy’s state postal service

10.10.2013

The near-bankrupt Italian airline Alitalia is to receive an emergency capital injection from Italy’s state-owned post office. Italy’s government did not say how much Poste Italiane SpA, the Italian postal service, would be investing – but it might be up to €100 million.  The Italian government hope the link between  Poste Italiane and Alitalia would lead to a synergy of logistics, in passengers and cargo.  Italy’s civil aviation authority had warned just hours earlier that the airline risked being grounded if new financing was not found urgently. Alitalia needs some €455 million to stay afloat. The Italian government justified what amounted to state intervention saying Alitalia was considered a national asset.   It filed for bankruptcy in August, as high staff costs, industrial relations issues and surging oil prices further dented its finances. It is being suggested that Alitalia might be able to merge with Air France-KLM to help get it out of its financial problems. Alitalia went bankrupt in 2008, and was re-launched in 2009.

http://www.airportwatch.org.uk/?p=17904

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