EU orders Germanwings, Ryanair and TUIfly to repay large sums for subsidies wrongly obtained
In February 2014 the European Commission adopted new guidelines on how Member States can financially support airports and airlines in line with EU state aid rules. The aim is to ensure fair competition. The aim is to avoid overcapacity and the duplication of unprofitable airports, or support for an airport that is too close to another. Aid is allowed if there is seen to be a genuine need for accessibility by air to a region, to help economic growth. Many low cost airlines have derived benefit from subsidies to airports, and now a number are having to make repayments for money they should not have obtained. The EU has confirmed that Germanwings must pay €1.2 million, Ryanair €500,000 and TUIfly €200,000 that they got from Germany’s Zweibruecken airport, in the form of lower fees. Zweibruecken is only 25 miles from Saarbruecken airport. Brussels Airlines separately faces an EU probe into €19 million that airlines at Belgium’s Zaventem airport received from the state to fund operating costs from 2014 to 2016. And there are other cases. Belgium’s Charleroi airport must give back €6 million in aid.
Germanwings, Ryanair and TUIfly Told to Repay Airport Aid
Deutsche Lufthansa’s Germanwings, Ryanair Holdings Plc and TUI’s TUIfly were ordered by European Union regulators to repay illegal subsidies they got from Germany’s Zweibruecken airport in the form of lower fees.
Germanwings must pay €1.2 million, Ryanair €500,000 and TUIfly €200,000, the EU said in an e-mailed statement today.
Lufthansa affiliate Brussels Airlines NV separately faces an EU probe into €19 million that airlines at Belgium’s Zaventem airport received from the state to fund operating costs from 2014 to 2016.
“Duplicating unprofitable airport infrastructure or unduly favoring certain airlines wastes taxpayers’ money and distorts competition,” said Joaquin Almunia, the EU’s anti-trust chief. Governments can support airports to improve transport links in a region or help economic growth, he said.
The EU has been investigating subsidies to several regional airports across Europe that may have benefited Ryanair and rival carriers. The Brussels-based European Commission must approve large state subsidies to airports and airlines. The commission criticized as “a waste of public money” aid for Zweibruecken given that it is only 40 kilometers (25 miles) away from Saarbruecken airport.
Germanwings and Meridiana Fly SpA must also repay aid granted to them by Sardinia’s Alghero airport, the EU said, without saying how much money was involved.
Germanwings spokesman Heinz-Joachim Schoettes said the company would examine the EU decision. TUIfly spokesman Jan Hillrichs said the funds were used to advertise Zweibruecken airport and the company’s services in the region, according to the contract.
Belgium’s Charleroi airport must give back €6 million in aid, the EU said, ending a probe it started 12 years ago into aid for Ryanair to start routes at the airport, 56 kilometers south of the Belgian capital Brussels.
The EU said most of the aid was justified because it had helped the area’s economy grow. Belgium must demand a higher concession fee from the airport in future, the EU said.
Ryanair didn’t receive subsidies at airports in Charleroi, Germany’s Saarbruecken, Frankfurt-Hahn and Sweden’s Vasteras because it paid above-cost prices for fees, the EU said.
Ryanair legal director Juliusz Komorek said today’s decisions showed that Ryanair’s agreements with the four airports didn’t involve illegal state aid, following EU decisions on seven other airports. Ryanair stopped flying from Zweibruecken in 2009, the company said in an e-mailed statement.
Vincent Grassa, a spokesman for Charleroi airport, declined to comment because its management team is studying the case. Brussels Zaventem airport representatives also declined to comment because it didn’t directly receive the funding the EU is probing.
Regulators approved state funding for Frankfurt-Hahn, Saarbruecken, Alghero and Vasteras.
Ryanair, which helped pioneer the low-cost business model in Europe, reduces costs partly by operating from smaller airports. Before 1997, when Ryanair started its first route to Dublin, Charleroi airport had about 30,000 passengers a year, Ryanair said. It had 6.8 million passengers last year, the airport said on its website.
To contact the reporter on this story: Aoife White in Brussels at email@example.com
Transport & Environment (T&E) have produced a short (and easy to read) briefing on state aid for airports and airlines.
It is at State Aid for Airports and Airlines
Consultation on rules for European Commission state aid to airports and airlines
European Commission Commission adopts new guidelines for state aid to airports and airlines
European Commission to clarify state aid to airports – making ineligible those with over 3 million passengers per year
Bankrupt Alitalia to get € millions of state aid from Italy’s state postal service
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.
…. and there are many more ………..