EU State Aid Consultation Seeks to Support Airline and Airport Sustainability

EU State Aid Consultation Seeks to Support Airline and Airport Sustainability

Brussels – The European Commission has initiated a public consultation on the revision of state aid guidelines for airports and airlines, with the aim of aligning the aviation sector with the ambitious targets of the Green Deal while preserving connectivity and promoting fair competition.

Key Objectives

The overarching goal of this initiative is to develop a state aid framework that effectively supports both connectivity for passengers and the environmental objectives outlined in the Green Deal, all while ensuring a level playing field within the aviation industry.

The Commission will examine how the aviation market has evolved since the adoption of the 2014 guidelines and project future trends to understand the sector’s dynamics better. The Commission’s enforcement practices related to the current guidelines will be assessed to identify areas for improvement, and it is anticipated that the consultation will identify the specific needs of the aviation sector that could be addressed through revised guidelines, ensuring that support is targeted and effective.

The Commission will also evaluate whether the existing guidelines should be updated and simplified to reduce administrative burdens and enhance compliance by member states.

A critical aspect of the review will be to determine how the guidelines can be better aligned with the priorities of the Green Deal, taking into account the support already available under the Climate, Energy and Environmental Aid Guidelines (CEEAG) and the Research, Development and Innovation (R&D&I) State aid guidelines.

Policy Options Under Consideration

The baseline scenario assumes that the current aviation guidelines will continue to apply without any amendments, with the possibility of providing operating aid to unprofitable regional airports ending in 2027.

However, several alternative policy options are being considered, including whether the current objectives of ensuring sufficient connectivity and decarbonising the aviation sector can be adequately addressed by other existing instruments, such as the Services of General Economic Interest (SGEI) package, the General Block Exemption Regulation, the CEEAG, and the rescue and restructuring guidelines.

The Commission will also consider whether start-up aid for airlines and investment aid to airports should be maintained and if the conditions attached to these types of aid should be adjusted.

Industry Calls for Increased Support

Major airlines have expressed their support for the initiative, with Ryanair advocating for a dedicated section in the revised guidelines for investments relating to the Green Deal, emphasising the need for clear state aid rules for green investments by airports and airlines, particularly for the uptake of Sustainable Aviation Fuels (SAF), which are crucial for achieving net-zero aviation.

Air France-KLM has also voiced its support, believing that state aid rules must play a role in transitioning towards net-zero emissions by enabling public support for the industry while also ensuring that the new regime remains workable and easy to implement to ensure adherence by granting authorities.

Air France-KLM suggests that such measures should cover both narrow-bodies and wide-bodies to reflect the heterogeneity of EU carriers and should be granted based on fair, transparent and non-discriminatory terms, which might imply primarily relying on schemes while individual aid should not be fully discarded if it can help achieve EU goals and policies.

Both airlines agree that state aid should be used to support the entire industry in bearing the cost of transition towards a less emitting model, with Air France-KLM proposing specific new aid measures for activities towards decarbonisation of the sector, such as the use of SAF beyond the required levels, the development and use of e-SAF and/or other new alternatives to SAF, investments and activities towards flying with electric and/or hydrogen planes, including test flights, and supporting fleet roll-overs from legacy aircraft to new generation aircraft.

Meanwhile, Airports Council International (ACI) Europe has highlighted that the increased compliance costs for both airlines and aisports will reduce demand for air travel and further challenge the financial viability of these airports. Measures like the ReFuel EU Regulation, revised ETS (Emission Trading Scheme), and the Alternative Fuels Infrastructure Regulation (AFIR) will add further cost pressures by requiring airports to invest in sustainable aviation fuel (SAF) infrastructure, electric aircraft charging, and other environmental upgrades.

The Commission’s public consultation will close on the 5th of March 2025, and adoption is currently planned for the second quarter of 2027.

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