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The European Commission has opened an in-depth investigation to assess whether financial arrangements between public authorities and the airport of Beauvais (France), as well as rebates and marketing agreements concluded between this airport and its customer airlines, are in line with EU state aid rules. The opening of proceedings gives interested third parties an opportunity to submit comments on the measures under assessment; it does not prejudge the outcome of the investigation.
Beauvais ( is a large regional airport in Oise (Picardie region), 75 km north of Paris, with a total traffic of 3 677 794 passengers in 2011. The airport is owned by the Syndicat Mixte de l’Aeroport de Beauvais Tille, and was operated by the local Chamber of Commerce (CoC) until May 2008. The operation of the airport was then awarded to SAGEB, whose main shareholder is the CoC, for 15 years.
From 2000 to 2008, the CoC benefited from public support measures for its activity as operator of Beauvais airport, including subsidies of over €10 million for airport infrastructure investment. As airport operator, SAGEB has also been granted public subsidies of €14.5 million for further infrastructure improvements.
At this stage, the Commission has doubts whether these measures, granted by several public entities (including the region, Conseil General de l’Oise and local municipalities), comply with the 2005 EU guidelines on state aid in the aviation sector. In particular, the Commission will check whether the subsidies were necessary to carry out the investments and whether they were proportionate to the objectives pursued.
Finally, the Commission will examine whether agreements between the airport operators and their customer airlines, such as marketing support contracts and discounts on airport and handling charges, have been carried out at market conditions. The Commission has concerns that such arrangements could give the airlines an undue economic advantage that their competitors do not enjoy.
Background
Investments by public authorities into companies carrying out economic activities are in line with EU state aid rules when they are made on terms that a private player operating under market conditions would accept (the market economy investor principle, MEIP). In the aviation sector, infrastructure investment subsidies can in principle be found compatible with the 2005 guidelines on state aid in the aviation sector when they are necessary, proportionate, pursue an objective of general interest, ensure non-discriminatory access for all users and do not unduly affect trade in the internal market. Operating support is far more likely to distort competition between airports and is therefore in principle incompatible with the internal market.
The Commission is currently conducting several investigations in the air transport sector
In 2012, the Commission plans to revise its guidelines on aviation – covering both airlines and the financing of airport infrastructure – following a public consultation.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
