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© Alberto Favaro

EC Representation in Malta

EU consults stakeholders on state aid to airlines
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11/04/2011 10:19:52

The European Commission has launched a public consultation to get stakeholders' views on the application of the 2005 EU Guidelines on the financing of airports and start-up aid to airlines from regional airports. The Commission also seeks views on the 1994 EU Aviation Guidelines that also contain rules for the assessment of social and restructuring aid for airlines. Submissions can be made until 6 June 2011. In light of the comments received, the Commission will decide, whether the guidelines need to be revised and will consult further before adopting any new rules.

    EU consults stakeholders on state aid to airlines

    "The air transport market has changed dramatically in the last 20 years. Gathering information from the market, from consumers and from Member States is a vital first step for us to assess whether the guidelines published in 1994 and 2005 remain appropriate for the market conditions of today or need to be changed and how. I hope as many people as possible respond to this consultation," said Commission Vice President in charge of competition policy Joaquín Almunia.

    Last November, the European Commission approved a €52 million loan from the Maltese government to Air Malta to keep the struggling Maltese national airline afloat while it works on its restructuring.

    Last March, Finance Minister Tonio Fenech informed Vice President Almunia of the ongoing discussions with the stakeholders, particularly the trade unions, where the minister said that “the restructuring plan would be forwarded to the Commission in the coming weeks. The Commission guidelines require that the restructuring plan includes the divestment of loss making activities, including the elimination of loss making routes, and this will mean that the number of employees will need to be reduced. Early retirement schemes are currently being drawn up”.

    Back in 1994, in the context of the liberalisation of the market for air transport services, the Commission adopted the first EU Aviation Guidelines, which contain provisions for assessing social and restructuring aid to airlines in order to provide a level playing field for air carriers. They were completed, in 2005, by guidelines on the public financing of airports and on the start up of airline services from regional airports. Since the entry into force of the 2005 Guidelines, the Commission has adopted more than 60 decisions concerning the financing of airports, airlines and start-up aid for the financing of new routes.

    The air transport market has evolved dramatically in recent years: low-cost carriers have developed new and comprehensive business models linked to regional airports and have gained substantial market shares. At the same time, the former national carriers have almost all completed their restructuring process, consolidating their presence in Europe.

    The purpose of the present consultation is, thus, to invite Member States and stakeholders to provide feedback on the application of the 1994 and 2005 Aviation Guidelines. The Commission is particularly interested to receive information about the changes in the business models of airlines and airports and recent developments concerning the financing of infrastructure and start-up aid to airlines.

    The Commission said it will analyse the submissions received before deciding what extent changes to the current rules are necessary and, if appropriate, come forward with a proposal for revised Aviation Guidelines by 2012.

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