EC opens investigation into state aid in Romanian air transport sector

The European Commission has opened two in-depth investigations under EU State aid rules into a Romanian support scheme for investments in regional airports and to verify whether certain rebates and discounts granted by the Timisoara airport to some airlines distort competition.

The Commission is particularly investigating the agreements concluded between the Timisoara airport and low-cost carrier Wizz Air, which could have given the latter an unfair economic advantage over its competitors.

In the case of the Timisoara airport, the EC is looking to verify whether the annual subsidies granted to the airport only serve to reduce the airport operator’s current expenditures. “In the absence of a general economic interest purpose, this would be incompatible with EU rules as it would provide an unfair advantage to the beneficiary with regard to its competitors, who have to operate without aid.”

The Commission is looking at the contractual relations between Timisoara airport and Wizz Air, namely a marketing agreement signed in 2008 and the non-payment of airport charges amounting to EUR 2.6 million as well as additional rebates of 72 to 85 percent on all airport charges for large aircraft (i. e. aircraft above 70 tons maximum take off weight). The concern of the EC is that such preferential treatment may have the effect of forcing out of the market the only competitor of Wizz Air on some routes.

The overall investigation looks into whether the public financing given to regional airports meets “a clearly defined objective of general interest, given the apparent oversupply of airport services in Romania,” an announcement from the commission states. “In addition, the Commission needs to assess whether the upgraded infrastructure is necessary and proportional, in particular with a view to the limited activity of the airports. The initial investigation shows that Romania’s regional airports are generally loss-making and that their operating losses are covered by the State on a yearly basis. EU rules allow for aid to start up services at regional airports or to cover for services of general economic interest. They do not allow for covering operating losses on a continued basis.”