European Commission caps subsidies for regional airports | Business| Economy and finance news from a German perspective | DW | 20.02.2014
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European Commission caps subsidies for regional airports

The European Commission has announced tighter rules for the provision of taxpayers' money for regional airports across the 28-member bloc. The planned restrictions may mean a blow to many low-cost carriers.

The EU executive said Thursday it had amended state-aid rules to provide a level playing field for both low-budget and traditional carriers using the bloc's regional airports.

It said that regional airports with fewer than three million passengers a year could continue receive aid for a transition period of 10 years.

The commission argued this would give the airports time to adjust their business model so that they'd eventually be able to fully cover their operating costs on their own.

The EU executive pointed out that subsidies had to be linked to a genuine transport need to ensure the accessibility of a given region.

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Recognizing the plight of even smaller airports with annual passenger numbers below 700,000, Brussels said those would get special treatment, allowing them higher aid levels coupled with a review of the situation after five years.

"The new rules will ensure fair competition regardless of the business model, from flag carriers to low-cost airlines, and from regional airports to major hubs," EU Competition Commissioner Joaquin Almunia said in a statement.

Low-cost carriers normally base their business on flights to and from regional airports rather than city hubs, winning passenger payments or lower charges from local authorities anxious to attract people to their regions. But traditional airlines have asserted that such payments give low-budget carriers an unfair advantage.

hg/ipj (dpa, AFP, Reuters)

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