EC begins state aid investigation into La Rochelle Airport

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La Rochelle Airport in France is being investigated by the European Commission to determine whether financial arrangements with public authorities are in line with European Union state aid regulations.

The Commission is looking into subsidies amounting to €3 million ($4 million) which La Rochelle Airport's operator, the local Chamber of Commerce, received from various public bodies between 2002 and 2005 to pay for airport infrastructure projects.

"At this stage, the Commission has doubts whether the measures comply with EU guidelines on state aid in the aviation sector," said the Commission in a statement.

"In particular, the Commission will verify whether the subsidies were necessary to carry out the investment, whether the aid was proportionate to the objectives pursued and whether the infrastructure had satisfactory medium-term prospects for use."

Also under investigation are cash advances of more than €8 million to the Chamber of Commerce since 2002, which the Commission believes "may constitute operating support to the airport operator in breach of EU state aid rules".

Marketing support contracts and discounts on airport charges offered to airlines to open new routes from La Rochelle are also being scrutinised because the Commission "has concerns that such arrangements could give their beneficiaries an undue economic advantage that their competitors do not enjoy".