The European Commission has announced an extension of state aid allowances for regional airports through to April 4, 2027. This comes under the 2014 Guidelines on State aid to airports and airlines, according to press release published today.
These guidelines allow EU member states to offer financial assistance to regional airports handling fewer than three million passengers annually. The intention is to support these airports towards cost-covering operations. Initially, a ten-year transition period was set, due to end on April 4, 2024.
The Commission noted a special provision, granting member states the ability to offer aid to airports with passenger traffic of up to 700,000 annually under more favorable terms. These airports typically face greater challenges in becoming cost-effective. Initially set for five years, this provision had already been extended once, until April 2024.
In the wake of the COVID-19 pandemic and the ensuing energy crisis stemming from Russia’s aggression against Ukraine, the aviation sector has seen a major crisis unfold. “Regional airports have been facing lower revenues and higher costs, which had an adverse impact on their profitability,” the European Commission explained. There’s concern that the harsh economic environment could lead to closures of some regional airports, potentially harming EU-wide connectivity.
In response to these “exceptional circumstances,” the European Commission made the decision to extend the transition period for granting aid by an additional three years. This move, the Commission hopes, will provide member states with more leeway to support regional airports in their path to profitability. This extension also applies to airports with an annual passenger traffic of up to 700,000 passengers.
Last year, the Commission sought feedback on the situation, launching a call for evidence about the viability of regional airports amidst the coronavirus pandemic. Most respondents to the consultation felt the extension was necessary to mitigate the pandemic’s impact on the airports’ ability to cover costs.
Between May and June of 2023, a public consultation was held to gather opinions on the proposed extension of the 2014 Guidelines. The details of the public consultation can be found here.
In sum, this extension of state aid allowances will provide some relief for regional airports, as they continue to navigate the financial challenges posed by the ongoing health and energy crises.
