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EUROPEAN COMMISSION Brussels, 30.7.2019 C(2019) 5837 final In the published version of this decision, PUBLIC VERSION some information has been omitted, pursuant to articles 30 and 31 of Council This document is made available for Regulation (EU) 2015/1589 of 13 July information purposes only. 2015 laying down detailed rules for the application of Article 108 of the Treaty on the Functioning of the European Union, concerning non-disclosure of information covered by professional secrecy. The omissions are shown thus […] Subject: State Aid SA. 53717 (2019/N) – Germany Operating aid for Rostock airport 2019 – 2024 Sir, 1. PROCEDURE (1) By letter dated 3 May 2019 and following pre-notification contacts, the German authorities notified to the Commission operating aid for the Flughafen Rostock- Laage-Güstrow GmbH (“FRLG”), the operator of Rostock-Laage airport (the “Airport” or “Rostock airport”). The notification was registered under the case number SA.53717. (2) The Commission sent a request for information to Germany on 17 June 2019. The requested information were submitted on 3 July 2019. (3) The operating aid to be granted in the present case is a prolongation of the operating aid granted to Rostock airport for the period 1 January 2018 to 3 April 2019 in case SA.49709, which was approved by the Commission on 10 August 2018 (“the 2018 Decision”)1. 1 Commission decision of 10 August 2018 in case SA.49709 (2017/N) – Germany: Rostock Airport, OJ C 360, 5.10.2018, p.5. Seiner Exzellenz Herrn Heiko MAAS Bundesminister des Auswärtigen Werderscher Markt 1 D - 10117 Berlin Commission européenne/Europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË - Tel. +32 22991111 (4) Point 134 of the Guidelines on State aid to airports and airlines (“the Aviation Guidelines”)2 stipulates that the Commission will reassess the situation of airports with annual passenger traffic of up to 700 000 four years after the beginning of the transitional period which starts on 4 April 2014. Aid for airports with up to 700 000 passengers per year could initially only be granted until 3 April 2019. On 18 December 2018 the Commission prolonged the existing regime for airports up to 700 000 passengers per year until 3 April 2024.3 2. DESCRIPTION OF THE AID 2.1. The beneficiary (5) The Airport is a regional passenger airport located near Rostock, the largest city in the north German state of Mecklenburg-Vorpommern. (6) Rostock airport was previously a purely military airport, and part of the infrastructure on-site is still owned by the military. The civil aviation sector at Rostock airport emerged in 1992, and since then the civilian part of the Airport has been operated by the publicly owned company FRLG. The ownership of the Airport is in more detail described in recitals (6) to (8) of the 2018 Commission Decision. (7) The nearest airports are Schwerin-Parchim airport, Stralsund-Barth airport and Neubrandenburg-Trollenhagen airport. None of these airports within 100 km/ 60 minutes radius of Rostock Airport is offering scheduled flights. A more detailed description of Rostock airport can be found in recitals (5) to (10) of the 2018 Decision. This description is still valid for the assessment of the aid measure at hand, except for the airlines using the airport. (8) In contrast to the situation of the Airport in 2018, Rostock airport lost in 2019 two important airlines, Germania and fly bmi, due to insolvency of those airlines. These insolvencies caused significant losses for the Airport in the area of both scheduled flights and holiday flights. In 2018 Germania was good for about […] % of all passenger traffic at Rostock airport, while fly bmi counted for […] % of the passengers. Due to the insolvency of both airlines Rostock airport lost about […] % of its passenger traffic at the beginning of 20194. (9) Moreover, also in the segment of cruise holidays, less passengers on chartered flights to Rostock, embarking cruise ships in the nearby city of Warnemünde, are expected by the Airport. Due to capacity bottlenecks at the port terminal, only ships with a limited capacity of 3000 passengers are allowed to access the Port of Warnemünde. The construction and operation of the new cruise terminal (with a bigger capacity of 5000 passengers) in Warnemünde is the responsibility of Rostock Port GmbH. The German authorities submitted that regarding the planning 2 Communication from the Commission - Guidelines on State aid to airports and airlines, OJ C 99, 4.4.2014, p. 3. 3 Communication from the Commission concerning the prolongation of the specific regime for operating aid for airports with up to 700 000 passengers per annum provided for in the Guidelines on State aid to airports and airlines, OJ C 456, 18.12.2018, p. 27. 4 See press releases of 18 February 2019 (“Fluggesellschaft flybmi – Einstellung des Flugbetriebes am Standort Rostock-Laage“) and 5 February 2019 („Insolvenzanmeldung Germania Fluggesellschaft”). Available at: https://www.rostock-airport.de/aktuelles.html. 2 of traffic in the segment of cruise holidays, Rostock airport can merely rely on publicly available information. However, according to press releases and information of Rostock Port, the opening of the new bigger terminal building is planned for the beginning of the season in 2020. According to the German authorities the bigger capacity of the new terminal allowing cruise ships of 5000 passengers instead of 3000, will also increase the number of passengers flying to Rostock airport on chartered flights, since there are no adequate transfer options available for cruise passengers from Southern Germany and Southern Europe, other than via Rostock airport. 2.2. Description of the measure 2.2.1. Purpose of the measure (10) Similar as in the 2018 Decision, the German authorities notified operating aid to Rostock airport to sustainably secure its functioning, in particular in the light of the recent insolvency of Germania and fly bmi, which could not be foreseen in the previous business plan submitted to the Commission in the context of the previous case. (11) The focus of the current notification is therefore on the additional operating aid, meant to help the Airport dealing with the insolvency of Germania and fly bmi. The German authorities submit that these insolvencies caused serious disruptions at the Airport in the form of significant loss of passengers in the short term. (see recital (8) above). The notified operating aid for an additional five-year period would help to secure the functioning of the airport until new connections with other airlines and deals with tour operators are set up again and fully operational. (12) In the respect, Rostock airport is currently negotiating with a number of other airline companies. In the area of holiday flights, the German authorities submitted that companies such as Corendon, Austrian Airlines, Laudamotion and FlyEgypt are interested to take over popular holiday destinations, previously served by Germania. For 2019, Rostock airport agreed on a weekly flight to Vienna with Austrian Airlines during the cruise season, on three weekly flights to Palma de Mallorca with Laudamotion during the summer season, and on two weekly flights to Antalya with Corendon during the summer season. These flights can be booked and are sold in all standard reservation systems and on the airlines websites5. In addition, further negotiations with these companies to schedule flights for 2020 and the middle to long term are ongoing. In the area of scheduled flights, the German authorities submitted that since 1 May 2019 Lufthansa has taken over the ten weekly flights previously 5 See e.g. https://www.rostock-airport.de/; https://book.austrian.com/app/fb.fly. See also press releases of 29 March (“Palma de Mallorca – DAS Trend Reiseziel 2019!”) and 20 February 2019 (“Neu Rostock – Mallorca: Laudamotion fliegt ab Juni drie Mal wöchentlich vom Ostseeflughafen nach Palma de Mallorca”). Available at https://www.rostock-airport.de/aktuelles.html. 3 operated by fly bmi to München6. Since Lufthansa is using bigger capacity aircraft, the number of passengers per flight is expected to be higher. For the next years, further connections to […], […], […], […] and […] are planned. (13) Apart from the specific situation in which Rostock airport finds itself due to the insolvencies of Germania and fly bmi, the German authorities reiterated that the Airport is important to improve accessibility of the region with the rest of Germany and Europe, which in turn will boost tourism and encourage industry investments (thanks to more business flights) in Mecklenburg-Vorpommern. Rostock is also an important airport in the region as it is currently one of the few airports in Germany holding a 24-hour flight permit without night restrictions. (14) For all these reasons, the German authorities claim it is important to support the Airport in its attempts to find solutions to bridge the difficult period after the insolvencies and to find new airlines willing to fill in the freed-up capacity at the Airport. 2.2.2. Aid amount, granting of the aid and commitments (15) The operating aid is intended to cover the operating funding gap of Rostock airport for the period from 4 April 2019 to 3 April 2024. (16) For the calculation of the maximum aid amount allowed under the present decision, the operating aid granted in the context of the 2018 Decision, covering the period from 1 January 2018 to 3 April 2019, is taken into account. (17) To guarantee the consistency between the value of all aid measures paid out by Germany to Rostock airport during the 10-year transitional period (4.4.2014 – 3.4.2024)7, and the value of the maximum aid caps, all amounts are discounted to the value on 4.4.2014, the start of the transitional period8.