Skip to main content
SpringerLink
Log in

State aid assessments in the aviation and ports sectors: The role for economic and financial analysis

  • Article
  • Published:
ERA Forum Aims and scope

Abstract

State aid issues in the aviation and port sectors are growing, with an increasing number of high-profile cases. The introduction of the 2014 Aviation Guidelines has led to greater potential for sophisticated economic and financial analysis in state aid assessments. As this trend is mirrored in the ports sector, the evidence required to demonstrate compliance with the market economy operator principle or the compatibility of aid is now much greater. Given this backdrop, this article discusses a number of topical issues in state aid assessments in these sectors, illustrated by reference to key decisions from the European Commission.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3

Similar content being viewed by others

Notes

  1. European Commission (2016), ‘State aid SA.41342 (2016/N)—Germany, Financing of Berlin Brandenburg Airport’, 3 August, C (2016) 4948 Final; and European Commission (2016), ‘State aid: Commission adopts three decisions requiring taxation of ports in the Netherlands, Belgium and France’, 21 January.

  2. European Commission (2014), ‘Guidelines on State aid to airports and airlines, Communication from the Commission’, Official Journal of the European Union, 4 April.

  3. Judgment of the General Court of 12 December 2000, Aéroports de Paris v Commission, T-128/98, EU:T:2000:290, para. 125, confirmed on appeal in Judgment of the Court of Justice of 24 October 2002, Aéroports de Paris v Commission, C-82/01 P, EU: C:2002:617.

  4. Under the 2014 Aviation Guidelines, airports with less than 3mppa are allowed to receive operating aid for a transitional period of ten years until April 2024. In order to support operating aid, a business plan must be drawn up that demonstrates full operating cost coverage from the airport’s own funds by the end of the transitional period.

  5. European Commission (2014), ‘New State aid rules for a competitive aviation industry’, Competition policy brief, Issue II, February.

  6. For example, in May 2013, the Commission adopted an initiative to provide a fair application of state aid rules for sea ports. For further details, see European Commission (2013), ‘Proposal for a Regulation establishing a framework on market access to port services and financial transparency of ports’, COM (2013) 296 final.

  7. European Commission (2016), ‘Commission Notice on the notion of State aid as referred to in Article 107(1) TFEU’.

  8. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of Regions on EU State Aid Modernisation (SAM), COM(2012), 209 final.

  9. European Commission (2014), ‘Guidelines on State aid to airports and airlines, Communication from the Commission’, Official Journal of the European Union, 4 April.

  10. European Commission (2015), ‘Commission Decision of 26 February 2015 on the measure SA.35388 (2013/C) (ex 2013/NN and ex 2012/N)—Poland, Setting up the Gdynia-Kosakowo airport’, 26 February.

  11. For example, the 2014 Aviation Guidelines state that the catchment area ‘in general means a geographic market boundary that is normally set at around 100 kilometres or around 60 minutes travelling time.’ For further details, see European Commission (2014), ‘Guidelines on State aid to airports and airlines, Communication from the Commission’, Official Journal of the European Union, 4 April.

  12. European Commission (2014), ‘Commission Decision of on the measures SA.22030-2007/C, SA.29404 and SA.32091-2012/C—Germany Financing arrangements regarding Flughafen Dortmund GmbH and the schedules of airport charges NERES and NEO’, 23 July, para. 224.

  13. Civil Aviation Authority (2012), ‘Heathrow, Gatwick and Stansted—market power assessments, Summary of the CAA’s initial reviews—January 2012’, p. 3.

  14. The discount rate reflects the time value of money, as well as the uncertainty of future cash flows—the greater the uncertainty of future cash flows, the higher the discount rate. The net present value of a stream of cash flows measures how much the cash flows are expected to be worth at a particular point in time.

  15. Reuters (1997), ‘Munich airport authority breaks even for the first time’, 31 January; and Aviation Weekly (1988), ‘Air Transport, Munich’s New International Airport Expected to Begin Operations in 1991’, 22 February.

  16. For further details on the Diabolo project, see https://www.infrabel.be/en/diabolo-project, accessed on 2 February 2017.

  17. European Commission (2011), ‘White Paper, Roadmap to a Single European Transport Area—Towards a competitive and resource efficient transport system’, 28 March, para. 23.

  18. European Commission (2014), ‘Decision on measure SA.38302 (2014/N)—Italy: Investment Aid to the Port of Salerno’, 27 March’, para. 60.

  19. European Commission (2013), ‘State aid SA.35418 (2012/N)—Extension of Piraeus port—Greece’, 2 July, para. 36; and European Commission (2016), ‘Communication from the Commission, Commission Notice on the notion of State aid as referred to in Article 107(1) TFEU’, pp. 69–70.

  20. European Commission (2013), ‘State aid SA.35418 (2012/N)—Extension of Piraeus port—Greece’, 2 July, para. 36.

  21. European Commission (2014), ‘State aid SA.35720 (2014/NN) (ex 2012/PN)—United Kingdom, Liverpool City Council Cruise Liner Terminal’, 11 March, para. 52.

  22. European Commission (2014), ‘Decision on measure SA.38302 (2014/N)—Italy: Investment Aid to the Port of Salerno’, 27 March.

  23. European Commission (2014), ‘Decision on measure SA.38302 (2014/N)—Italy: Investment Aid to the Port of Salerno’, 27 March, para. 46.

  24. European Commission (2014), ‘Commission Decision of 23.07.2014 on State Aid SA.33961 (2012/C) (ex 2012/NN) implemented by France in favour of the Chamber of Commerce and Industry of Nîmes-Uzès-Le Vigan, Nîmes Airport-Veolia Transport, Ryanair, Airport Marketing Services’, 23 July, paras 378–380.

  25. ACI (2010), ‘The Ownership of Europe’s Airports’, p. 6.

  26. European Commission (2012), ‘Commission Decision on the measure SA.23600-C 38/2008 (ex NN 53/2007)—Germany, Financing arrangements concerning Munich Airport Terminal 2’, 3 October, paras 75–77.

  27. European Commission (2014), ‘Commission Decision of 01.10.2014 on the state aid SA.21121 (C29/2008) (ex NN 54/2007) implemented by Germany concerning the financing of Frankfurt Hahn airport and the financial relations between the airport and Ryanair’, 1 October, C(2014) 6853 final, para. 457.

  28. This is in line with the Stardust Marine judgment. For further details, see Case C-482/99 France v Commission [2002] ECR I-04397, para. 71.

  29. European Commission (2014), ‘Communication from the Commission—Guidelines on State aid to airports and airlines’, Official Journal of the European Union, Volume 57, C99, 4 April, para. 63.

  30. For example, in the Commission’s decision on Frankfurt-Hahn Airport, the Commission concluded that the costs of the new passenger terminal were not specifically required for Ryanair, and should therefore not be attributed to the MEOP profitability assessment of the agreements with Ryanair. For further details, see European Commission (2014), ‘Commission Decision of 01.10.2014 on the State aid SA.21121 (C29/2008) (ex NN 54/2007) implemented by Germany concerning the financing of Frankfurt Hahn airport and the financial relations between the airport and Ryanair’, 1 October, para. 444.

  31. European Commission (2014), ‘Communication from the Commission—Guidelines on State aid to airports and airlines’, Official Journal of the European Union, Volume 57, C99, 4 April, para. 59.

  32. European Commission (2014), ‘Commission Decision of 01.10.2014 on state aid case SA.18857 (2012/C, ex 2911/NN)—Alleged aid to Västerås Airport and Ryanair Ltd’, 1 October, paras 20 and 252.

  33. European Commission (2014), ‘Commission Decision of 01.10.2014 on state aid case SA.18857 (2012/C, ex 2911/NN)—Alleged aid to Västerås Airport and Ryanair Ltd’, 1 October, para. 255

  34. For example, see European Commission (2015), ‘State aid to airports and airlines one year after the adoption of the new Guidelines’, slides presented by Nicolas Imbert, case manager at the European Commission, at the ACI Europe’s Regional Airports’ Conference & Exhibition in Reykjavik, 20 May, slide 8.

  35. European Commission (2014), ‘Commission Decision (EU) 2015/06 of 20 February 2014 on the measures taken by Germany with regard to Flughafen Berlin-Schönefeld GmbH and various airlines—SA.15376 (C 27/07, ex NN 29/07)’, 1 April, para. 122.

  36. European Commission (2014), ‘Commission Decision (EU) 2015/06 of 20 February 2014 on the measures taken by Germany with regard to Flughafen Berlin-Schönefeld GmbH and various airlines—SA.15376 (C 27/07, ex NN 29/07)’, 1 April, para. 187.

  37. European Commission (2014), ‘Commission Decision of 15.10.2014 on the State Aid SA.26500 (2012/C) (ex 2012/NN CP 227/2008), Germany, Altenburg Nobitz Airport and Ryanair Ltd.’, 15 October.

  38. European Commission (2014), ‘Communication from the Commission—Guidelines on State aid to airports and airlines’, Official Journal of the European Union, Volume 57, C99, 4 April, para. 63.

  39. European Commission (2012), ‘Commission Decision of 20 November 2012, State aid SA.34191 (2012/C) (ex 201/NN)—Alleged aid to Air Baltic, OJ C 69/40, para. 11.

  40. European Commission (2014), ‘Commission Decision of 01.10.2014 on state aid case SA.18857 (2012/C, ex 2011/NN), Alleged aid to Västerås Airport and Ryanair Ltd’, para. 258.

  41. European Commission (2014), ‘Commission Decision of 01.10.2014 on state aid case SA.18857 (2012/C, ex 2011/NN), Alleged aid to Västerås Airport and Ryanair Ltd’, para. 260.

  42. For example, incremental non-aeronautical revenues were based on indicative analysis undertaken by France, and incremental operating costs were based on an analysis provided by the Chamber of Commerce. For further details, see European Commission (2014), ‘Commission Decision of 23.07.2014 on State Aid SA.33963 (2012/C) (ex 2012/NN) implemented by France in favour of the Chamber of Industry in Angoulême, SNC-Lavalin, Ryanair and Airport Marketing Services’, 23 July, para. 380 and paras 385–386.

  43. Translated version of European Commission (2014), ‘Commission Decision of 23.07.2014 concerning state aid SA.33963 (2012/C) (ex 2012/NN) implemented by France in favour of the Chamber of Industry in Angoulême, SNC-Lavalin, Ryanair and Airport Marketing Services’, 23 July, para. 385.

  44. For further details, see European Commission (2016), ‘Commission invites comments on revised criteria for implementing unproblematic state support for ports and airports’, press release, 13 October, http://europa.eu/rapid/press-release_IP-16-3398_en.htm.

Author information

Authors and Affiliations

  1. Oxera Consulting LLP, Avenue Louise 81, Box 11, 1050, Brussels, Belgium

    Nicole Robins

Authors
  1. Nicole Robins
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Nicole Robins.

Additional information

Oxera Consulting LLP is a limited liability partnership registered in England No. OC392464, registered office: Park Central, 40/41 Park End Street, Oxford, OX1 1JD, UK. The Brussels office, trading as Oxera Brussels, is registered in Belgium, SETR Oxera Consulting LLP 0651 990 151, registered office: Avenue Louise 81, Box 11, 1050 Brussels, Belgium. Oxera Consulting GmbH is registered in Germany, no. HRB 148781 B (Local Court of Charlottenburg), registered office: Rahel-Hirsch-Straße 10, Berlin 10557, Germany.

Although every effort has been made to ensure the accuracy of the material and the integrity of the analysis presented herein, the Company accepts no liability for any actions taken on the basis of its contents.

No Oxera entity is either authorised or regulated by the Financial Conduct Authority or the Prudential Regulation Authority. Anyone considering a specific investment should consult their own broker or other investment adviser. We accept no liability for any specific investment decision, which must be at the investor’s own risk.

© Oxera 2017. All rights reserved. Except for the quotation of short passages for the purposes of criticism or review, no part may be used or reproduced without permission.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Robins, N. State aid assessments in the aviation and ports sectors: The role for economic and financial analysis. ERA Forum 18, 121–138 (2017). https://doi.org/10.1007/s12027-017-0457-4

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s12027-017-0457-4

Keywords

Search

Navigation