Italy's support to Sardinian airlines breached EU state aid rules
The European Commission has found that public support granted by Italy's Sardinia region gave selected airlines working at Cagliari and Olbia airports an unfair advantage, in breach of EU state aid rules, which must be repaid.
In 2010, Sardinia adopted a scheme to develop air transport and to ensure air connections to and from the island of Sardinia all year round. The scheme provided financing to the Sardinian airports of Cagliari and Olbia, which in turn used it to provide financial compensation to selected airlines. The objective of this compensation was for these airlines to increase air traffic to Sardinian airports and carry out related marketing activities.
In January 2013, the Commission opened an in-depth investigation to examine whether this scheme was in line with EU state aid rules. Concerning aid to the Sardinian airports, the Commission concluded that no state aid was granted to the airports because the public funding was passed on in full to the airlines. The airports obtained no advantage and served only as an intermediary to transfer the aid to the beneficiaries.
The Commission found that financial compensation was granted by the airports to the airlines for the opening of new routes or extension of operations on existing routes to Sardinia. This provided a financial incentive for the selected airlines to increase air traffic to Sardinia. Furthermore, the selected airlines also received financial compensation from the airports for carrying out marketing operations that are a part of their normal business.
State aid to airlines may be justified and compatible provided it meets an objective of general interest, such as regional development or accessibility. However, the Commission found that the measures failed to meet the criteria set by the 2005 Guidelines on state aid for developing regional airports. In particular, the measures were not designed to make routes profitable without public funding in the future and were not restricted to the extra costs of opening new routes.
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