European airports and regional carriers have broadly welcomed new state-aid guidelines as improving on the original proposals, but still highlight concerns over their implementation.

New guidelines published by the European Commission today set maximum permissible aid levels depending on airport size. Operating aid to regional airports – those with fewer than three million passengers per annum – will be allowed, under certain conditions, for a 10-year transition period. It also set out rules allowing limited start-up aid for airlines on new routes.

“European airports compete tooth and nail to retain and attract air services, and these much awaited new guidelines provide a level playing field upon which to do so," says ACI Europe director general Olivier Jankovec in a joint statement with the Assembly of European Regions. "Hopefully, they will also bring an end to the squabbling between the different types of airlines, as the real-world parameters of these new rules become clearer in the months ahead.”

In particular, ACI backs the Commission's change to its original plan to curb operating aid for all airports with more than 200,000 passengers per annum after a 10-year transitional period. Instead, the guidelines provide for what the Commission calls a "special regime" for airports handling up to 700,000 passengers annually. But ACI adds that the guidelines fall short of "long-term legal certainty" as the Commission plans to re-assess the measure in five years' time.

"The new guidelines better reflect the economic realities of operating a small airport. They also recognise – at least for the time being – that closing down these airports would damage connectivity and kill regional communities not only in remote and peripheral regions, but across Europe.” says Jankovec.

“That said, those structural and financial challenges that regional airports face today are still going to be with us in 2019 and, if anything, will have intensified. We already know that regulatory-induced costs are going to increase for airports, while newly permitted levels of operating aid will stand at just 80% of current operating-funding gaps. When decision time comes around again, we will simply not be in a position to get this wrong.”

Jankovec welcomes the focus the guidelines give to the regulation of start-up aid to airlines, but adds: "The implementation and enforcement of these new rules will ultimately determine whether clarity and simplicity have been achieved."

European Regions Airline Association director general Simon McNamara also points to improvements on the original proposals. “The new text is a step forward in that it does recognise, more than the original EC proposal, that state funding, when fairly allocated, is essential to regional development,” he says.

"But the Commission has not proposed enough requirements for increased transparency and the issue of inconsistent enforcement of the rules across Europe has not been adequately addressed. This means that distortions in the market are still likely to occur," adds McNamara.

European lobby group Transport & Environment hit out at the guidelines. "The Commission openly acknowledges that operating aid is the most distortive form of aid," says the group's aviation manager Bill Hemmings. "Yet with its new state-aid guidelines, it not only legalises past subsidies, but also gives a new blank cheque to airports and airlines that fail to boost local economies."

Source: Cirium Dashboard