AEA welcomes the consultation on new EU State aid guidelines

IMG_0021The Association of European Airlines (AEA) welcomes the European Commission’s initiative to reviewthe existing state aid guidelines on the public financing of airports and start-up aid to airlines. During the consultation, AEA will share European airlines’ view on state aid rules and will urge the European Commission to establish strict criteria.

The current set of rules, dating back to 1994 and 2005, no longer reflects the changed market environment. Their application is often not monitored and several route start-up aid schemes arenot even notified to or by Member States. In many cases the success of regional EU airports is not based on market economics as demand has been created artificially by unclear subsidy schemes, which results in market distortion. “The dozens of on-going state aid investigations launched by the European Commission provide clear evidence of the lack of transparency and the need for a thorough review and clarification”, says Mr Athar Husain Khan, AEA’s acting Secretary-General.

AEA therefore supports the European Commission’s efforts to update the rules. “We urge the Commission to base the new guidelines on strict criteria”, says Mr Khan. “First of all, we expect the new rules to avoid any kind of discrimination based on either airlines’ business model or airport size. Therefore we are not in favour of support schemes based on volume thresholds. Subsidy schemes must have a duration that is limited in time less than the proposed 10 years. Limitations must also be put in place for loss-generating airports or cumulative aids. Last but not least, we call for the Commission to guarantee full transparency and enforcement in case of non-compliance by airports or airlines.”

AEA also asks the Commission to address market distortion created by the current railway subsidy schemes. On routes where there is a choice between transport modes, these schemes can harm the competition.

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