COVID-19: the European Commission approves aid for Riga, Florence and Pisa airports

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At the beginning of March, the European Commission approved two aid measures to support Riga, Florence and Pisa airports, severely affected by the COVID-19 pandemic.

On 2 March, the Commission approved an Italian aid of EUR 10 million to compensate the damage suffered by Toscana Aeroporti, the operator of the airports of Pisa and Florence, as a result of the COVID-19 pandemic and the restrictive measures adopted by the Italian State to limit the spread of the virus. These measures have resulted in significant operating losses that the Italian authorities intend to compensate through direct subsidy.

The Region of Tuscany based its intervention on article 107(2)(b) of the TFEU, which allows the Commission to approve state aid to compensate for the damage directly caused by exceptional occurrences. The COVID-19 pandemic was recognized by the Commission as an "exceptional occurrence" because of its extraordinary and unforeseeable nature and its significant impact on the economy. In this case, the Commission found that the measure is aimed at compensating for the damage directly linked to the COVID-19 pandemic and that it is proportionate, since the compensation does not exceed (and is even lower) than what is necessary to make good the damage.

On 8 March, the Commission also approved a Latvian aid of up to EUR 39.7 million for the recapitalisation of the 100% State-owned Joint Stock Company Riga International Airport. This measure includes a capital injection of EUR 35.2 million and a waiver of EUR 4.5 million dividend payment for the 2019 financial year.

These measures were approved under article 107(3)(b) TFEU under the conditions set out in the Temporary Framework on State Aid (conditions relating to the necessity, appropriateness and size of the intervention; conditions relating to the entry of the State into the company's capital, its remuneration and incentives to exit from the capital; conditions relating to governance, etc.). The Commission concluded that the recapitalisation measure was necessary, appropriate and proportionate to remedy a serious disturbance in the economy. It aims at restoring the financial position and liquidity of Riga International Airport in the exceptional circumstances caused by the COVID-19 pandemic while maintaining the necessary safeguards to limit distortions of competition.

The number of notifications of public support measures to support European airports in the context of the COVID-19 crisis remains marginal, notwithstanding the Commission's flexibility with regard to State support measures for air transport in the current crisis context.

It will take time for the air transport sector to recover its pre-crisis COVID-19 level of activity. Indeed, it is expected that the capacity of the European aviation sector will be significantly reduced in the medium term at least until 2023.

Further measures are expected to be adopted in the coming weeks, as the need to support European airports is urgent in view of the fact that the aviation sector is one of the most affected by the crisis.