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The 2005 guidelines on the financing of airports  and start-up aids to airlines Practical experiences Annabelle Lepièce 8 ...
<ul><li>Adoption by the European Commission of the Guidelines in 2005  :  </li></ul><ul><ul><li>Following the Ryanair deci...
Principles of the Guidelines <ul><li>Financing of airports  : </li></ul><ul><ul><li>No aid for the managing of airports or...
Financing of airports <ul><li>Principle   :  airports should be run as private companies </li></ul><ul><li>Consequence  : ...
SGEI (public service missions)   <ul><li>Guidelines : notification of public financing for airports above 1 million passen...
Public financing of airport infrastructure  <ul><li>Principle   :   </li></ul><ul><ul><li>Private investor principle </li>...
Public financing of airport infrastructure <ul><li>In practice   :  </li></ul><ul><ul><li>In-depth assessment of all condi...
Incentives to airlines <ul><li>Principle   :  </li></ul><ul><ul><li>Private investor principle: difficult assessment in re...
Start-up aids <ul><li>Compulsory notification to the European Commission </li></ul><ul><li>12 conditions to fulfill, some ...
Conclusions <ul><li>The 2005 Guidelines : new EC policy towards the financing of airports </li></ul><ul><li>Financing of a...
Conclusions <ul><li>Revision of the Guidelines  :  </li></ul><ul><ul><li>More precise conditions for the financing of airp...
<ul><li>Merci  pour votre attention </li></ul><ul><li>Annabelle Lepièce </li></ul><ul><li>Avocat </li></ul><ul><li>CMS DeB...
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The 2005 guidelines on the financing of airports

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Transcript of "The 2005 guidelines on the financing of airports"

  1. 1. The 2005 guidelines on the financing of airports and start-up aids to airlines Practical experiences Annabelle Lepièce 8 September 2009
  2. 2. <ul><li>Adoption by the European Commission of the Guidelines in 2005 : </li></ul><ul><ul><li>Following the Ryanair decision of 12 February 2004, annulled by the CFI on 17 November 2008 </li></ul></ul><ul><li>Evaluation of the Guidelines in 2009 </li></ul>June 10, 2010 Slide The 2005 guidelines on the financing of airports and start-up aids to airlines
  3. 3. Principles of the Guidelines <ul><li>Financing of airports : </li></ul><ul><ul><li>No aid for the managing of airports or infrastructure (private investor principle) </li></ul></ul><ul><ul><li>Except : </li></ul></ul><ul><ul><ul><li>Activities that normally fall under State responsibility: safety air, traffic control, police, customs </li></ul></ul></ul><ul><ul><ul><li>Public financing of Services of General Economic Interest (SGEI) </li></ul></ul></ul><ul><ul><ul><li>Authorized aids for the infrastructure for regional airports (EC notification) </li></ul></ul></ul><ul><li>Incentives in favor of airlines : </li></ul><ul><ul><li>Private investor principle </li></ul></ul><ul><ul><li>Authorized start-up aid (EC notification) </li></ul></ul>June 10, 2010 Slide The 2005 guidelines on the financing of airports and start-up aids to airlines
  4. 4. Financing of airports <ul><li>Principle : airports should be run as private companies </li></ul><ul><li>Consequence : public interventions should conform to the private investor principle (business plan, foreseeing and reasonable return on investment) </li></ul><ul><li>Examples : inquiries of the European Commission following complaints : </li></ul><ul><ul><li>Tampere airport : public financing of the conversion of a freight terminal into a low cost terminal </li></ul></ul><ul><ul><li>Tortoli-Arbatax airport : fee for the additional infrastructure to be paid by the airport manager only if the passengers traffic exceeds 500.000 per year </li></ul></ul><ul><li>In practice : assessment of all public financing (subsidies, capital injections, guarantees and loans, lease or sale of public land and buildings) </li></ul>June 10, 2010 Slide The 2005 guidelines on the financing of airports and start-up aids to airlines
  5. 5. SGEI (public service missions) <ul><li>Guidelines : notification of public financing for airports above 1 million passengers per year </li></ul><ul><li>Decision of November 2005 on the financing of SGEI : no notification if the public compensation is below 30.000.000 EUR and the turnover of the airport manager is below 100.000.000 EUR </li></ul><ul><li>No EC decision </li></ul><ul><li>In practice : strict compliance to the EU conditions ensures the legality of public funding </li></ul>June 10, 2010 Slide The 2005 guidelines on the financing of airports and start-up aids to airlines
  6. 6. Public financing of airport infrastructure <ul><li>Principle : </li></ul><ul><ul><li>Private investor principle </li></ul></ul><ul><ul><li>If not : aid in favor of regional airports (below 5 millions passengers per year) to be notified to the EC </li></ul></ul><ul><li>Very broad conditions for authorization : </li></ul><ul><ul><li>Defined objective of general interest (regional development, accessibility, etc.) </li></ul></ul><ul><ul><li>Infrastructure necessary and proportional to the objective </li></ul></ul><ul><ul><li>Satisfactory medium term prospect for use </li></ul></ul><ul><ul><li>Access for all potential users </li></ul></ul><ul><ul><li>No affection of the development of trade </li></ul></ul>June 10, 2010 Slide The 2005 guidelines on the financing of airports and start-up aids to airlines
  7. 7. Public financing of airport infrastructure <ul><li>In practice : </li></ul><ul><ul><li>In-depth assessment of all conditions by the EC </li></ul></ul><ul><ul><li>Examples of subsidized Infrastructure : runway extension, new terminal, conversion of a military airport into a civil one, safety equipments, aprons, cargo warehouse, etc. </li></ul></ul><ul><ul><li>Authorized aid for Berlin Brandenburg Airport (category A) </li></ul></ul><ul><li>Motivation of the authorization : connectivity and regional development, improvement of the safety of the infrastructure, tourism, decrease of aircraft noise </li></ul><ul><li>Aid intensity : 50 to 70 % </li></ul>June 10, 2010 Slide The 2005 guidelines on the financing of airports and start-up aids to airlines
  8. 8. Incentives to airlines <ul><li>Principle : </li></ul><ul><ul><li>Private investor principle: difficult assessment in regional airports </li></ul></ul><ul><li>In practice : </li></ul><ul><ul><li>Business plan showing the profitability of the routes incentives </li></ul></ul><ul><ul><li>European Commission’s inquiries on alleged aids to Ryanair, EasyJet, DHL, etc. (Tampere airport, Leipzig, Berlin, Bratislava, Alghero, Hahn, Pau, etc.) </li></ul></ul><ul><ul><li>Airlines and airports’ creativity : marketing agreements, general reduction of airport charges, etc. </li></ul></ul><ul><ul><li>De minimis aid : 200.000 EUR by airline for a three years period </li></ul></ul>June 10, 2010 Slide The 2005 guidelines on the financing of airports and start-up aids to airlines
  9. 9. Start-up aids <ul><li>Compulsory notification to the European Commission </li></ul><ul><li>12 conditions to fulfill, some inadequate or too constraining : </li></ul><ul><ul><ul><li>Only in favor of European airlines and for EU destinations </li></ul></ul></ul><ul><ul><ul><li>No aids for regional airports close too major hubs </li></ul></ul></ul><ul><ul><ul><li>Development plan by destination </li></ul></ul></ul><ul><li>Lack of success (7 EC decisions) </li></ul>June 10, 2010 Slide The 2005 guidelines on the financing of airports and start-up aids to airlines
  10. 10. Conclusions <ul><li>The 2005 Guidelines : new EC policy towards the financing of airports </li></ul><ul><li>Financing of airport infrastructure : flexible approach of the European Commission on notified aids (8 Member States) </li></ul><ul><li>Incentives to airlines : </li></ul><ul><ul><li>great uncertainty for airports </li></ul></ul><ul><ul><li>in-depth inquiries of the European Commission following complaints </li></ul></ul>June 10, 2010 Slide The 2005 guidelines on the financing of airports and start-up aids to airlines
  11. 11. Conclusions <ul><li>Revision of the Guidelines : </li></ul><ul><ul><li>More precise conditions for the financing of airport infrastructure to increase legal certainty </li></ul></ul><ul><ul><li>Start-up aids : </li></ul></ul><ul><ul><ul><li>suppression of inadequate or too constraining conditions </li></ul></ul></ul><ul><ul><ul><li>abolition of the notification to the European Commission </li></ul></ul></ul>June 10, 2010 Slide The 2005 guidelines on the financing of airports and start-up aids to airlines
  12. 12. <ul><li>Merci pour votre attention </li></ul><ul><li>Annabelle Lepièce </li></ul><ul><li>Avocat </li></ul><ul><li>CMS DeBacker </li></ul><ul><li>Chaussée de La Hulpe, 178 </li></ul><ul><li>1170 - Bruxelles </li></ul><ul><li>Tél. +32 2 743 69 34 </li></ul><ul><li>Email : [email_address] </li></ul>June 10, 2010 Slide The 2005 guidelines on the financing of airports and start-up aids to airlines
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