In November 2011, Italy notified a compensation scheme aimed at improving air transport services between Sardinia and the European and Italian mainland, notably outside peak holiday periods.
The European Commission has opened an in-depth investigation to examine whether an Italian scheme granting financial support to certain airport operators in Sardinia and the air carriers operating in these airports is in line with EU state aid rules. At this stage, the Commission has concerns that such public support may procure the beneficiaries an undue economic advantage that their competitors do not have. The opening of an in-depth investigation gives interested third parties an opportunity to submit comments on the measures under assessment; it does not prejudge the outcome of the investigation.
In November 2011, Italy notified a compensation scheme aimed at improving air transport services between Sardinia and the European and Italian mainland, notably outside peak holiday periods. Under the scheme, airport operators are compensated for selecting airlines that are able to meet certain annual targets, i.e. frequencies and passenger volume on given “strategic” routes. In turn, selected airlines are granted financial contributions from the respective airports for delivering these services. The scheme foresees selection of airlines through a tender. According to the notification, the scheme was designed to apply in 2012 and 2013.
The Commission takes the preliminary view that the scheme has already been implemented, in breach of the standstill obligation in Article 107 of the Treaty on the Functioning of the European Union (TFEU) that requires Member States to get Commission approval before implementing state aid projects. Indeed, the scheme is laid down in a regional law of 2010 and implementing acts have been adopted thereafter. As of 2010, the airports of Alghero, Cagliari and Olbia have received advance payments of the compensation assigned to them, through loans granted by the financial branch of the Sardinian Region. These airports have, in turn, paid financial contributions to air carriers, including Ryanair, for the transport services operated in the respective airports. No tender has been carried out for the selection of airlines.
Italy contends that the compensation is intended to remunerate airports for the discharge of a public service obligation in relation to air transport from and to the island. However, the Commission has doubts that the compensation to airports meets the criteria of the EU rules on services of general economic interest (SGEI), in particular criteria regarding a clear definition of the public service remit and the selection of the service at the least cost. Moreover, the Commission has doubts whether the measure in favour of air carriers complies with the specific state aid rules for the aviation sector, in conjunction with SGEI rules, and invites Italy to submit elements for a full assessment in this respect.
The Commission will now investigate to either confirm or infirm these doubts. Member States and interested third parties may submit comments within one month from publication of today’s decision in the EU’s Official Journal.
Tatiana is the news coordinator for TravelDailyNews Media Network (traveldailynews.gr, traveldailynews.com and traveldailynews.asia). Her role includes monitoring the hundreds of news sources of TravelDailyNews Media Network and skimming the most important according to our strategy.
She holds a Bachelor's degree in Communication & Mass Media from Panteion University of Political & Social Studies of Athens and she has been editor and editor-in-chief in various economic magazines and newspapers.
