Zijne Excellentie De Heer Steven VANACKERE Minister Van Buitenlandse Zaken Karmelietenstraat 15 B - 1000 Brussel

EUROPEAN COMMISSION

Brussels, 15.07.2010 C(2010) 4913

PUBLIC VERSION

WORKING LANGUAGE

This document is made available for information purposes only.

Subject: State aid No N 114/2010 – Belgium Financial start-up contribution for important programmes which improve the promotion and the development of Antwerp Airport

Dear Sir,

1. PROCEDURE

1. In accordance with Article 108(3) of the Treaty on the Functioning of the European Union (TFEU)1, and by electronic notification dated 23 March 2010 (registered under reference SANI 4252) the Belgian authorities notified the Commission of their intention to put in place an aid scheme entitled "Financial start-up contribution for important programmes which improve the

1 With effect from 1 December 2009, Articles 87 and 88 of the EC Treaty have become Articles 107 and 108, respectively, of the TFEU. The two sets of provisions are, in substance, identical. For the purposes of this decision, references to Articles 107 and 108 of the TFEU should be understood as references to Articles 87 and 88, respectively, of the EC Treaty where appropriate.

Zijne Excellentie de Heer Steven VANACKERE Minister van Buitenlandse Zaken Karmelietenstraat 15 B - 1000 Brussel

Commission européenne, B-1049 Bruxelles – Belgique Europese Commissie, B-1049 Brussel – België Téléphone: 00 32 (0) 2 299.11.11.

promotion and the development of Antwerp Airport". The European Commission acknowledged receipt of the notification by e-mail on the same date and this case was given the number N114/2010. 2. The Commission requested further information by letter of 28 April 2010. The Belgian authorities provided the requested information on 31 May 2010.

2. CONCISE DESCRIPTION OF THE AID/MEASURE

2.1. Purpose of the aid

3. Antwerp Airport is a regional airport with an annual passenger volume of less than 1 million. This airport is situated in the Flemish Region; the latter is the competent authority for the management of the airport. The purpose of this start-up aid is the economic development of Antwerp Airport. 4. The development of Antwerp Airport is aimed at by attracting a number of airline companies to offer different services. The start-up aid is justified by the following arguments. 5. The airport is of great importance for the province and city of Antwerp as a factor determining the location of businesses. Researches shows that the presence of an airport is decisive in the choice of location of internationally oriented companies. Cluster effects can be expected as airport oriented companies, like logistic service companies, encourage related companies to also locate in the area. This clustering increases with the growth of the airport. 6. Through its specific features and small-scale character, Antwerp Airport can easily anticipate the growing need of business people to travel fast and comfortable. This is shown, amongst others, by the success of the current flights to London City and to Manchester, and the expansion of business aviation, supported by the construction of additional hangars by two companies in this sector. The regional airport of Antwerp anticipates several needs of the business world as an optimal accessibility by car, taxi or bus, as well as a check-in up to 20 minutes prior to departure due to very short walking distances and a free parking. It should be emphasized that the speed, the flexibility and the comfort of the offered services are very important assets in the future development of this market segment. 7. In addition, the current capacity of Antwerp Airport and its passenger terminal is insufficiently used with the existing connections and frequencies. On week days, 4 to 5 flights to London City are operated; also 2 flights per week day are operated to Manchester. 8. A first initiative aimed to tackle the problem of undercapacity was undertaken in 2007 when the Belgian authorities notified the Commission of their intention to set up a start-up aid scheme for opening new routes and creating additional frequencies from/to Antwerp Airport. This scheme, which expired on 1 January 2010, had been cleared by Commission's decision referrenced N

2 156/20072 on the basis of the Community guidelines on financing of airports and start-up aid to airlines departing from regional airports3. 9. By means of the public support granted in the framework of the start-up scheme for 2007–2009 an additional route was set up, conecting Antwerp to Manchester. This route, which is currently operated by the company CityJet, former VLM, benefited from the subsidy for the above-mentionned period and generated accordingly the following number of passengers: – For 2007: 25.823 passengers;

– For 2008: 26.725 passengers;

– For 2009: 26.652 passengers.

10. After expiring the three years of subsidized period the air carrier operates this connection in a autonomous way, without further public support. 11. The slight decrease registered in 2009 was imputable to the negative impact of the financial and economic crisis. However, according to the submitted information by the Belgian authorities, the activity is currently recovering. 12. In the light of the abovementioned arguments Belgian authorities concluded that the aid presently under examination will stimulate and keep promoting the start-up of new routes and connections. This will ensue during this period in additional demand for Antwerp Airport, both from private individuals and companies.

2.2. National legal basis

13. The Special Act of 8 August 1980 on institutional reform (Belgian Official Gazette 15 August 1980), in particular Article 6, §1, X, 7°, stipulates that the Regions are competent for the "equipment and operation of the airports and the public airfields, with the exception of Brussels National Airport". This Special Act has been modified by the Act of 8 August 1988 modifying the Act of 8 August 1980 on institutional reform (Belgian Official Gazette 13 August 1988). 14. The Co-operation Agreement of 30 November 1989 between the Belgian State which acts for the Nationale Maatschappij der Luchtwegen4 and the Regions (Belgian Official Gazette 9 March 1989), read jointly with the Royal Decree of 5 August 1992 (Belgian Official Gazette 1 September 1992) effect the transfer of goods, rights and obligations of the Nationale Maatschappij der Luchtwegen to the Flemish and Walloon Regions. 15. While in keeping with Article 22 of the Flemish Government Decree of 8 June 1994 on the financial and material management of the Separate

2 OJ C 271, 14.11.2007, p. 2

3 OJ C 312, 9.12.2005, p.1

4 National company for air traffic and navigation adopted in 1998 the denomination Belgocontrol.

3 Management Services Antwerp Airport and Ostend Airport (Belgian Official Gazette 20 October 1994) the Flemish Government "determines landing, take-off and passenger taxes", the Separate Management Service Antwerp Airport is authorised to “fix the other tariffs for the use of the infrastructure and the sale prices of the services of the airport itself". 16. The Flemish Government Decree of 27 July 2004 determines the competences of the members of the Flemish Government (Belgian Official Gazette 4 August 2004), modified by Decrees of the Flemish Government of 15 October 2004 and 23 December 2005. 17. The Ministerial Order of 13 March 2009 (Belgian Official Gazette of 8 April 2009) determines airport fees for Antwerp Airport. Pursuant its article 13(3), "Specific agreements may be concluded for important programs aiming at the promotion and at the development of airports".

2.3. Administration of the aid

18. Antwerp Airport is owned by the Flemish Region and is managed by the Flemish department Mobility and Public Works as a ‘Separate Management Service’. 19. The bookkeeping of Antwerp Airport is being supervised by the internal services of the Flemish government and by the auditor’s office. 20. The financial start-up contribution will be paid by the Separate Management Service Antwerp Airport. This contribution will be booked as working expenses and this on a new, separate cost centre. The charges for the new connections, imposed in implementation of the Ministerial Order of 13 March 2009 determining airport fees for Antwerp Airport will be entered as operating revenue. 21. With respect to the budget rules, the Separate Management Service Antwerp Airport makes a yearly budget of all corporate yields and corporate expenses, following the instructions of the Flemish government. This budget is joined to the general expenditure budget of the Flemish Region.

2.4. Form of the aid

22. The start-up aid will take the form of a reduction on landing/take-off fees and on passenger fees, limited to a digressive percentage of the start-up costs, such as marketing and advertising costs and installation costs which the airline has to incur to start up the new route or increase the frequency on existing routes.

2.5. Usually applicable airport fees

23. The Ministerial Order of 13 March 2009 determines airport fees for Antwerp Airport as follows. 24. For aircraft with a maximum takeoff weight (MTOW) of 10 tonnes, the landing and takeoff fees amount to 4 € per tonne per landing and per takeoff, between 6:30 am and 11:00 pm local time. The minimum fee is 12 € per landing or takeoff.

4 25. For aircraft with a MTOW of between 10 and 30 tonnes, the landing and takeoff fees amount to 40 €, with additional 3 € per tonne above 10 tonnes, per landing or takeoff between 6:30 am and 11:00 pm local time. 26. For aircraft with an MTOW of 30 tonnes or higher, the landing and takeoff fees shall amount to 100 €, with additional 4 € per tonne above 25 tonnes, per landing or takeoff between 6:30 am and 11:00 pm local time. 27. The fee for parking aircraft at the airport amount to 3 € per day and per tonne or portion thereof, with a minimum of 15 €. Knowing that: – Aircraft of up to 3 tonnes is exempt from parking fees for the first three hours following the actual time of arrival;

– Aircraft of between 3 and 5 tonnes is exempt from parking fees for the first four following the actual time of arrival;

– Aircraft of between 5 and 7 tonnes is exempt from parking fees for the first five hours following the actual time of arrival;

– Aircraft of 7 tonnes and more is exempt from parking fees for the first six hours following the actual time of arrival.

28. A passenger fee of 14 € is due for each departing passenger. A reduced passenger fee applies to transit passengers. The passenger fee is not due for children of less than 2 years, for crew members and for flights of governmental importance as stated in Article 12 of the Ministerial Order of 13 March 2009.

2.6. Modalities of the support for air routes

29. The start-up contribution will only be granted for the opening of new routes or raising the frequency on existing flights that increase the net volume of passengers between Antwerp Airport and other airports located on the territory of the European Union. The mere substitution, during the start-up contribution period, of one route by another, leaving from Antwerp Airport and expected to generate at least an equivalent number of passengers, will not call into question the continuation of payment of start-up contribution for the complete period, as long as this substitution does not affect the other criteria under which the contribution was initially granted. 30. Routes and frequencies that have already benefited from public contribution granted in the framework of the start-up scheme N 156/2007 are excluded from the scope of the present set of measures considering the same eligible costs. Belgian authorities have explicitly confirmed this commitment. 31. The Antwerp region is currently served with the high-speed rail (HSR) connection Amsterdam–Antwerp–Brussels–Paris. In this respect, the airport will not grant start-up aid for routes corresponding to high-speed train links.

5 2.6.1. Start-up contribution for new destinations

32. With respect to the public contribution for new destinations, the fee to be paid by the passenger can be reduced by granting start-up aid to cover the difference between: – For the 1st year: the paid passenger fee and an amount of 4 €;

– For the 2nd year: the paid passenger fee and an amount of 6 €;

– For the 3rd year: the paid passenger fee and an amount of 8 €.

33. In addition, the airline does not need to pay the landing and the take-off fees neither the parking fees as far as they are connected to the additional flights during the 1st, the 2nd and the 3rd years. 34. Taking into account the purpose of the aid, the air carriers must use the sum of the aforementioned amounts, obtained thanks to the reduction and/or the exemption from airport fees, to cover the start-up costs, including marketing and advertising costs that are to be made at the starting-up and possibly also installation costs which the airline company has to incur in order to start up the route or increase an existing frequency, within the following limits: – For the 1st year: a maximum coverage of 50% of these costs;

– For the 2nd year: a maximum coverage of 30% of these costs;

– For the 3rd year: a maximum coverage of 10% of these costs.

35. The total amount of the start-up contribution is however limited to an average of 30% of the eligible costs. 2.6.2. Start-up contribution for additional frequencies

36. The modalities provided in part 2.6.1 before apply to start-up contribution for additional frequencies. 37. In such event, the contribution must be used for the sole purpose of increase of movements and passengers in comparison with the time period when the aid carrier was operating the route on the basis of a lower frequency. 38. An increase of passengers, compared with the amount of the year of reference, leads to the exemption to pay the charge for the use of the installations and services to passengers while an increase of movements, compared with the year of reference, leads to the exemption to pay the takeoff and landing charges as well as the parking charges. 39. Start-up costs are real costs, incurred under normal market conditions, including marketing and advertising costs that are to be made at the beginning in order to give publicity to the route, and possibly the installation costs to be made by the airline at Antwerp Airport to start up a new route, provided these costs have not yet been subsidised. No start-up contribution will be granted for regular operating costs. 40. The start-up contribution is paid on the basis of submitted invoices, accompanied by the necessary substantiating documents, for the

6 aforementioned marketing, advertising and installation costs for the purposes of the new connection or the new frequencies and after payment by the airline of the different airport charges set up by Ministerial Order of 13 March 2009. 41. The start-up contribution is cancelled as of the fourth year of the operations. This means that as from the fourth year of the operations onwards, the normal charges laid down in the Ministerial Order of 13 March 2009 are again applicable.

2.7. Duration, Budget and Beneficiaries

42. The aid may be granted between 1 January 2010 and 31 December 2012. An air transport undertaking may apply for a start-up contribution until 31 December 2012. The latest would be spread out over a period of three years. 43. However, the Belgian authorities have specified that the Preliminary rules and the preliminary agreement will be published only after approval by the European Commission. In addition, the Preliminary rules contain a stipulation that the start-up aid will only be granted when the conditions and conformity with the relevant EU rules are met.

44. The start-up contribution should be stopped once the objectives in terms of passengers have been reached or when the line breaks even, even if it is achieved before the end of the period initially foreseen.

45. The start-up contribution is financed through the annual budget of the Separate Management Service Antwerp Airport.

46. The total budget for the measure would depend on the number of applications and the capacity offered on the new routes and will become clear only from the business plan of the candidates, airline companies. A simulation based on a new route with 5 days of 3 rotations (return flights) and 1 day of 2 rotations per week would lead to a budget of EUR 379,064 in the first year, to EUR 369,064 in the second year and to EUR 339,064 to the third year. Hence, the total start-up aid for the new connection will maximally amount to EUR 1,087,192 per air transport undertaking and per route .

47. In case of an additional frequency of 1 rotation per day, the start-up aid the airport will be deprived amounts to EUR 117,960 in the first year, to EUR 109,960 in the second year and to EUR 97,960 in the third year. The total aid for an additional frequency per day will amount to EUR 325,880.

48. The start-up aid for a new connection and a new frequency would reach therefore a maximum of EUR 1,413,072.

49. In case three airlines would subscribe under the same assumptions, as explained earlier, the total amount of start-up aid would increase to EUR 4,239,216.

50. The total amount is to be considered as an estimate, based on existing contacts with airline companies. The airport expects not to exceed these amounts, but they are not considered as an absolute maximum.

7 51. The number of beneficiaries is indicative. However, the airport does not expect that more airlines would apply for the measure. The current contacts between the airport and the airlines do not indicate that a big number of them would be interested. Furthermore, the number of applications would be limited by the existing infrastructure at the airport, the limitations imposed by environmental regulations and the proximity of Brussels Airport.

2.8. Procedure for the award of the aid and payment

52. Section 1.2 of the Preliminary rules laying down the conditions for airlines to benefit from the financial start-up contribution specifies that the public support for airline activities from Antwerp Airport may only be granted based on the Communication from the Commission Community Guidelines on financing of airports and start-up aid to airlines departing from regional airports.

53. Every proposal for a new program will be handled on an equal basis in order to avoid discrimination when granting the aid. The intention of the public authorities to grant start-up aid will be made public sufficiently in advance in order to enable all potentially interested airline companies to offer their services. The Belgian authorities indicated that Antwerp Airport will apply very strictly the principles of attribution of aid, based on a non-discrimination principle in compliance with the rules related to public procurement and concession.

54. On the basis of the previous experience and considering the specificity of Antwerp Airport Belgian authorities refuted the assumption that the potential number of applicants might require an amount of aid higher than the available budget. The projected data show that the scheme will generate a limited number of demands. Further, given the fact that Antwerp Airport operates currently under its capacity a further development of the activity is conceivable within the framework of the existing infrastructure and the available staff. Thus, several additional connections and frequencies might be ensured without extra costs.

55. Only air transport undertakings holding a valid operating licence granted by a Member State according to Regulation (EC) No 1008/2008 of the European Parliament and of the Council of 24 September 2008 on common rules for the operation of air services in the Community5 can apply for such start-up contributions. 56. Each air transport undertaking that seeks to provide a service for which a start-up contribution can be attributed, must present a business plan when submitting its bid to demonstrate the viability of the route during a considerable period of time after the contribution has ended.

5 OJ L 293, 31.10.2008, p.3

8 57. Prior to the attribution of the contribution, the airport will examine which impact the new route may have on the competitive routes as well as the existing high speed train connections. 58. The start-up contribution is paid by the "Separate Management Service Antwerp Airport" after receipt of the marketing and publicity invoices and after payment by the air carrier of the different airport charges mentioned in the Ministerial Order of 13 March 2009 laying down the airport charges at Antwerp Airport.

2.9. Prohibition of cumulation

59. The start-up contribution may not be combined with other types of contributions granted for the operation of a route, such as contributions of a social nature granted to certain categories of passengers or compensations for public services. In addition, such start-up contribution may not be granted when access to a route has been reserved for a single carrier under Article 16 of Regulation (EC) No. 1008/2008, in particular paragraph 9 of that Article. Such start-up contribution also may not be combined with another contribution granted to cover the same costs (including contributions paid in another EU Member State).

2.10. Penalties and repayment

60. In case the airline does not comply with its commitments subject to which the contribution has been granted and notwithstanding the penalties, foreseen initially in article 15 of the Ministerial Decree of 1 June 2006 concerning the determination of airport fees for Antwerp Airport6, the air carrier, after having been declared in default, will have a reasonable delay to make sure it respects the rule concerned or to dispute the existence of a non-compliance. 61. If, further to a proper procedure, it is duly and undoubtedly proved and confirmed, that an air carrier has not met its obligations, such air carrier must repay the contribution already received from Antwerp Airport, increased with a fixed penalty amounting to 0.5 % of the already paid contribution.

2.11. Complaints and disputes

62. According to the Belgian law the right of appeal is submitted to a double stage procedure. If, in case of dispute, an agreement cannot be reached between the airport management and the airline company, the Flemish Minister responsible for regional airports will first of all be requested to mediate. Assuming that this mediation did not lead to the desired result, the case should therefore be submitted to the competent court of the judicial district of Antwerp.

6 This decision was subsequently repealed and replaced by Ministerial Order of 13 March 2009 see supra (15).

9 2.12. Reporting

63. Each year, Antwerp Airport draws up a report listing of all supported routes. The origin of the government contribution, the beneficiary, the contribution amount paid as well as the number of passengers is mentioned for each route. This overview and the annual report will be published on the airport's website and spread on a hard-copy.

3. ASSESSMENT OF THE MEASURE

3.1. Existence of Aid

64. According to Article 107(1) of the TFEU, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the provision of certain goods shall be incompatible with the internal market, in so far as it affects trade between Member States, save as otherwise provided for in the Treaty. 65. The proposed scheme consists of a grant of subsidies coming from State resources, attributed to certain undertakings by the Belgian/Flemish authorities (through the Separate Management Service Antwerp Airport which makes its budget following the instructions of the Flemish governement). The subsidies in question will provide a competitive advantage to the beneficiaries vis-à-vis other operators active in the same liberalised market, by reducing the costs that these beneficiaries should normally bear. No information which would have allowed considering the start-up contribution granted in accordance with the principle of private investor in a market economy was submitted by the Member State7. 66. This state funding affects trade between Member States and distorts or threatens to distort competition inside the market as it involves air transport which is a fully liberalised market. Accordingly it has to be considered that the notified scheme constitutes aid within the meaning of Article 107(1) of the TFEU.

3.2. Compatibility of Aid

67. In relation to the financing by public authorities of start-up aid of airlines the Commission must have regard to the Community guidelines on financing of airports and start-up aid to airlines departing from regional airports8, hereinafter – the 2005 guidelines. 68. The 2005 guidelines set out a number of conditions (in point 79 thereof) to be complied with in order for start-up aid of this type to be found compatible with the internal market under Article 107(3)(c):

7 The enforcement of this principle has been foreseen in section 3.2.4 of the 2005 guidelines.

8 Aforementioned supra (8)

10 (1) (a)…"the aid is paid to air carriers with a valid operating licence issued by a Member State pursuant to Council Regulation (EEC) No 2407/92 on licensing of air carriers"9. 69. The Belgian authorities have undertaken that only air carriers with a valid operating licence pursuant to Regulation 1008/2008 may apply for the grants, therefore this condition is complied with10. (2) (b) "…the aid is paid for routes linking a regional airport in category C or D to another EU airport." 70. Antwerp Airport is a category D airport (“small regional airport”), with an annual passenger volume of less than 1 million for the purposes of the 2005 aviation guidelines. (3) (c) "…aid will apply only to the opening of new routes or new schedules, (as defined in the guidelines), which will lead to an increase in the net volume of passengers. This aid must not encourage traffic simply to be transferred from one airline or company to another. In particular, it must not lead to a relocation of traffic which is unjustified with regard to the frequency and viability of existing services leaving from another airport in the same city, the same conurbation11 or the same airport system12, which serve the same or a similar destination under the same criteria". 71. As shown in paragraphs (29) and (30), the start-up contribution will only be granted for the opening of new routes or raising existing frequencies that increase the net volume of passengers to and from Airport. There is no other airport in the same city or conurbation13. This condition is therefore complied with. (4) (c), 3rd paragraph "Also, start-up aid must not be paid when the new air route is already being operated by a high-speed rail service under the same criteria". 72. As stated in paragraph (31), the Belgian authorities have specified that no start-up aid will be granted to new routes or additional frequencies corresponding to HSR connections. This condition is therefore complied with.

9 Council Regulation (EEC) No 2407/92 of 23 July 1992 on licensing of air carriers (OJ L 240, 24.8.1992, p.8)

10 The Commission notes, that following the entry into force of Regulation (EC) No 1008/2008 of 24 September 2008 on common rules for the operation of air services in the Community, Regulation 2407/92 has been repealed and, according to Article 27 of Regulation 1008/2008, references to the repealed Regulation shall be construed as references to Regulation 1008/2008.

11 Council Regulation (EEC) No 2408/92 on access for Community air carriers to intra-Community air routes (OJ L 240, 24.8.1992, p.8)

12 As defined under Article 2(m) of Council Regulation (EEC) No 2408/92 on access for Community air carriers to intra-Community air routes.

13 Following the entry into force of Regulation (EC) No 1008/2008 on common rules for the operation of air services in the Community on 1 November 2008, repealing Regulation (EC) No 2408/92 on access for Community carriers to intra-Community air routes, the notion of an "airport system" no longer exists in Community law.

11 (5) (d) "…the route receiving the aid must ultimately prove profitable, i.e. it must at least cover its costs, without public funding. For this reason start-up aid must be degressive and of limited duration. 73. In the present case the aid paid to the airlines is both degressive and time limited, and a condition of the grant of aid to a beneficiary airline is that the applying air carrier must demonstrate, on the basis of a business plan, the viability of the route during a considerable period of time after the contribution has ended. This condition is therefore complied with. (6) (e) "…the amount of aid must be strictly linked to the additional start-up costs incurred in launching the new route or frequency and which the air operator will not have to bear once it is up and running". 74. The notification provides that aid will only be granted in respect of real costs, incurred under normal market conditions, including marketing and advertising costs that are to be made in the beginning to give publicity to the route, and possibly the installation costs to be made by the airline at Antwerp Airport to start up the route, provided these costs have not yet been subsidised. No start-up contribution will be granted for regular operating costs. 75. The start-up contribution is only paid by after receipt of the marketing and publicity invoices. 76. This condition is complied with. (7) (f) "…digressive aid may be granted for a maximum period of three years. The amount of aid in any one year may not exceed 50% of total eligible costs for that year and total aid may not exceed an average of 30% of eligible costs. For routes from disadvantaged regions, i.e. the outermost regions, the regions referred to in Article 87(3)(a), and sparsely populated regions, degressive aid may be granted for a maximum period of five years. The amount of aid in any one year may not exceed 50% of total eligible costs for that year and total aid may not exceed an average of 40% of eligible costs. If the aid is granted for five years, it may be maintained at 50% of total eligible costs for the initial three years". 77. Aid is granted for a maximum of three years. The funding will be granted in respect of each route for a maximum of 50% of eligible costs in the first year, 30% in the second year and 10% in the third year. In addition, Belgian authorities have set for the whole subsidized period an average ceiling of 30% of the eligible costs, applicable to the total amount of aid. This condition is therefore complied with. (8) (f), 3rd paragraph "In any event, the period during which start-up aid is granted to an airline must be substantially less than the period during which the airline undertakes to operate from the airport in question". "Furthermore, the aid should be stopped once the objectives in terms of passengers have been reached or when the line breaks even, even if this is achieved before the end of the period initially foreseen". 78. The conditions to be fulfilled by applicants specify that, indeed, the period during which a start-up contribution is granted to the airline must be substantially shorter than the period during which the airline undertakes to operate from the

12 airport in question; the applying air carrier must demonstrate this in the submitted business plan, as already mentioned in paragraph (56). 79. As stated supra in paragraph (44), the anticipated achievement of the objectives in terms of number passengers or profitability implies the stopping of the aid. 80. Therefore, these conditions are complied with. (9) (g) "…aid payments must be linked to the net development of the number of passengers transported". 81. The aid is paid in the form of a reduction on take-off/landing fees and on passenger fees. While take-off and landing fees present an indirect link with the number of passengers (via the capacity of the aircraft), the passenger fees, which are proportionally more important, are directly related to the number of passengers. Hence, there is a clear link between the number of passengers carried leading to the development of the route and the amount of aid paid. (10) (h) "…any public body which plans to grant start-up aid to an airline for a new route, whether or not via an airport, must make its plans public in good time and with adequate publicity to enable all interested airlines to offer their services. The notification must in particular include the description of the route as well as the objective criteria in terms of the amount and the duration of the aid". 82. The internal regulation will be published once the measure has been approved by the Commission. The information for possible applicants will describe the application procedures, including objective criteria with regard to the amount and the duration of the aid. The airport will publish this information in good time to allow all interested airlines to apply and will ensure the non- discriminatory treatment of applicants. This condition is therefore complied with. (11) (i) "…when submitting its application, any airline which proposes a service to a public body offering to grant start-up aid must provide a business plan showing, over a substantial period, the viability of the route after the aid has expired. The public body should also carry out an analysis of the impact of the new route on competing routes prior to granting start-up aid." 83. As shown in paragraph (56), each airline that seeks to provide a service for which a start-up contribution can be attributed, must present a business plan when submitting its bid to demonstrate the viability of the route during a considerable period of time after the contribution has ended. 84. Furthermore, the Belgian authorities have stated that the airport will examine which impact the new route may have on the competitive routes as well as the existing high speed train connection. 85. This condition is therefore complied with. (12) (j)"States must ensure that the list of routes receiving aid is published annually for each airport, in each instance indicating the source of public funding, the recipient company, the amount of aid paid and the number of passengers concerned".

13 86. The Belgian authorities have undertaken that every year Antwerp Airport will draw up and publish a report listing all supported routes and indicating the origin of the government contribution, the beneficiary, the amount of the contribution and the number of passengers for each route. 87. It results from the above-mentioned statement that this condition is complied with. (13) (k) "…where applicable, appeal procedures must be provided for at Member State level to ensure that there is no discrimination in the granting of aid". 88. As shown in paragraphs (62), procedures are provided for to deal with complaints with regard to the aid scheme or the agreements concluded on implementation thereof. This condition is therefore complied with. (14) (l) "…penalty mechanisms must be implemented in the event that a carrier fails to keep to the undertakings that it gave in relation to an airport when the aid was paid." 89. The notified scheme provides that in case the airline does not comply with its commitments, subject to which the contribution has been granted, the air carrier, after having been declared in default, will have a reasonable delay to make sure it respects the rule concerned or to dispute the existence of a non- compliance. 90. If, further to a proper procedure, it is duly and undoubtedly proved and confirmed, that an air carrier has not met its obligations, such air carrier must repay the contribution already received from Antwerp Airport, increased with a fixed penalty amounting to 0.5 % of the already paid contribution. The Commission can conclude that this condition is complied with. 91. In addition, Point 80 of the 2005 guidelines provides that "start-up aid cannot be combined with other types of aid granted for the operation of a route, such as aid of a social nature granted to certain categories of passengers and compensation for discharging public services. In addition, such aid cannot be granted when access to a route has been reserved for a single carrier under Article 4 of Regulation (EEC) No 2408/92, and in particular paragraph 1(d) of that Article. Also, in accordance with the rules of proportionality, such aid cannot be combined with other aid granted to cover the same costs, including aid paid in another State." 92. As shown in paragraph (59), this condition is complied with14. 93. Consequently, the Commission considers that the conditions for compatibility as set out in the 2005 guidelines have been satisfied in the present case. 94. Accordingly, the notified aid scheme can be considered compatible with the internal market pursuant to Article 107(3)(c) of the TFEU.

14 Cf. Aforementioned supra, paragraph (8). Article 4(1)(d) of Regulation 2408/92 has been replaced by Article 16(9) of Regulation 1008/2008.

14 4. DECISION

The Commission has accordingly decided: - To consider the notified aid scheme to be compatible with the Treaty on the Functioning of the European Union.

If this letter contains confidential information which should not be disclosed to third parties, please inform the Commission within fifteen working days of the date of receipt. If the Commission does not receive a reasoned request by that deadline, you will be deemed to agree to the disclosure to third parties and to the publication of the full text of the letter in the authentic languages on the Internet site: http://ec.europa.eu/community_law/state_aids/state_aids_texts_fr.htm and http://ec.europa.eu/community_law/state_aids/state_aids_texts_nl.htm. Your request should be sent by registered letter or fax to:

European Commission, Directorate-General Competition State Aid Greffe B-1049 Bruxelles Fax: +32 2 296 12 42 [email protected]

Yours faithfully, For the Commission

Joaquín Almunia Vice-President of the Commission