Brussels, 31 July 2020 Case No: 85346 Document No: 1143144 Decision No 099/20/COL

Ministry of Trade, Industry and Fisheries PO Box 8090 Dep 0032 Oslo NORWAY

Subject: COVID-19 Compensation to TORP Sandefjord Airport

1 Summary (1) The EFTA Surveillance Authority (“ESA”) wishes to inform Norway that, having assessed the compensation to TORP Sandefjord Airport (“the measure”), it considers that the measure constitutes state aid within the meaning of Article 61(1) of the EEA Agreement and decides not to raise objections1 to the measure, as it is compatible with the functioning of the EEA Agreement, pursuant to its Article 61(2)(b). ESA has based its decision on the following considerations.

2 Procedure (2) The Norwegian authorities notified the measure on 30 July 2020.2

3 Description of the measure 3.1 Background (3) The COVID-19 outbreak has resulted in travel restrictions and advice against non- essential travel all over the world, closing down the vast majority of passenger air transport.3 In an attempt to counter the spread of the virus, the Norwegian Government has adopted a series of measures that have resulted in an almost complete shut-down of all civil aviation, both domestic and international. This has resulted, among other things, in significant losses in turnover for Norwegian airports.

(4) The aviation sector has been directly affected by the following measures: (i) Restrictions on daily life. In the wake of the crisis, responsible health authorities closed down schools and universities, prohibited cultural and sports events, and closed down certain business activities and meeting points.4 (ii) Rejection of foreign nationals. According to Regulation No 293 of 15 March 2020 relating to rejection of foreign nationals out of concern for public health,5 only Norwegian citizens were allowed into Norway, with very

1 Reference is made to Article 4(3) of the Part II of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice. 2 Document Nos 1146868–1146871. 3 See Eurocontrol, EACCC Pandemics Factsheet, Version 3.0, 16/04/2020, p. 33. 4 Decision of the Norwegian health authorities of 12 March 2020, available here. 5 https://lovdata.no/dokument/LTI/forskrift/2020-03-15-293.

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narrow exemptions for non-citizens that had particularly pertinent reasons for entering the country. These rules have since been relaxed. (iii) Travel restrictions and quarantine rules. According to Regulation No 470 of 27 March 2020 on infection control etc. during the corona outbreak,6 persons allowed to enter the country were quarantined upon arrival.7 On 15 June 2020, the Ministry of Foreign Affairs lifted the travel restrictions and quarantine obligation for European countries that meet specific criteria concerning day-to-day infection levels (“the green areas”). The map over the green areas is updated at least every 14 days, meaning it may be difficult to determine some time in advance if a country will be affected by the quarantine rules and travel restrictions. (iv) Distancing advice applicable on board aircraft. From 28 April 2020 to 11 June 2020, the Norwegian Government required airlines to operate with an empty seat between passengers on flights.8

(5) After 12 March 2020, the traffic at TORP Sandefjord Airport (“Sandefjord Airport”) dropped 95% below its normal level due to the measures taken by Governments to tackle the COVID-19 pandemic. This has led to a significant reduction and/or suspension of services, resulting in high operating losses for Sandefjord Lufthavn AS (“SLH”), the operator of the airport.

(6) SLH was forced to reduce its activity to the absolute minimum, in order to reduce costs, and thereby securing the survival of SLH. According to the Norwegian authorities, a complete shutdown of the airport was considered the preferred option by SLH in response to the COVID-19 outbreak. However, due to contractual obligations with the airline Widerøe and the need to ensure continued operation of the critical technical and crew base for the airline, SLH upheld very limited operations at the airport.

(7) Even though SLH has done what is possible to reduce costs, the losses expected over the next months and those already incurred will in all likelihood result in the failure of SLH. This will have severe negative knock-on effects for local citizens, the economic activity of the region, and Norwegian air transport in general.

3.2 Objective (8) The measure is meant to cover part of the damage directly caused to SLH from 1 March 2020 to 30 September 2020 (“the compensation period”) due to the public containment measures taken as a consequence of the COVID-19 outbreak.

3.3 National legal basis and aid granting authority (9) The Norwegian Parliament has appropriated NOK 90 million to remedy the consequences of the COVID-19 pandemic and secure the continued operation of the airport. The parliamentary appropriation is based on the constitutional

6 https://lovdata.no/dokument/SF/forskrift/2020-03-27-470. 7 Initially for 14 days and later reduced to 10 days. The rules were only subject to few exemptions. 8 https://www.regjeringen.no/no/aktuelt/korona-veileder-for-luftfarten-er-klar/id2700198/ (measure introduced); https://www.regjeringen.no/no/aktuelt/ny-side6/id2706066/ (measure lifted).

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prerogative of the Parliament to appropriate moneys, according to Section 75 letter d of the Constitution of Norway.9

(10) The aid will be granted by the Ministry of Transport in accordance with the directives given by the Norwegian Parliament. This will be done by means of a contract setting out the terms for the grant, SLH’s commitments, and sanctions in case of breach of these terms.

(11) The legal basis for the aid to SLH is therefore the contract between the Ministry of Transport and SLH, which implements the objective of the Norwegian Parliament of securing continued operations of Norwegian airports.

3.4 Beneficiary (12) The beneficiary of the aid, SLH, is the operator of Sandefjord Airport, which is an international airport, located at Torp in Vestfold and Telemark County, some 120 km by road south-south-west of Oslo.

(13) Norwegian airports can be divided in two groups: (a) the network of 42 airports owned by Avinor, and (b) other airports, typically operated by undertakings owned mainly by municipalities and/or counties.

(14) Sandefjord Airport is the largest privately operated airport in Norway, with 2 073 228 passengers in 2019. SLH has a 20-year concession from the Ministry of Transport to operate and own Sandefjord Airport as a civil airport until 31 December 2030. SLH is owned 43.26% by Vestfold and Telemark County, 43.26% by Sandefjord Municipality and 13.48% by Vestfold Flyplassinvest AS.

(15) Sandefjord Airport is the third largest international airport in Norway based on the number of passengers, after the two Avinor airports at Gardermoen (Oslo) and Flesland (Bergen). Sandefjord Airport is also the 11th largest domestic airport in Norway.

(16) Sandefjord Airport has both national and international routes operated by ten airlines, among others Widerøe, KLM and Ryanair.

(17) SLH was not an undertaking in difficulty, as defined in Article 2(18) GBER, on 31 December 2019.10 According to the Norwegian authorities, SLH has delivered positive operating results every year since 2000.

3.5 Aid instrument, budget and duration (18) The aid will be awarded in the form of a grant, paid as a lump sum. The amount of the grant is NOK 90 million.

9 The reasoning for the grant given by the parliamentary committee is reflected in Innst. 368 S (2019-2020) page 2. See also Recommendation to the Parliament (Innst. 360 S (2019-2020) point 1.1.11). 10 Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty (OJ L 187, 26.6.2014, p. 1), referred to at point 1j of Annex XV to the EEA Agreement, as amended by Commission Regulation (EU) 2017/1084 of 14 June 2017 amending Regulation (EU) No 651/2014 as regards aid for port and airport infrastructure, notification thresholds for aid for culture and heritage conservation and for aid for sport and multifunctional recreational infrastructures, and regional operating schemes for outermost regions and amending Regulation (EU) 702/2014 as regards the calculation of eligible costs (OJ L 156, 20.6.2017, p. 1), see Joint Committee Decision No 185/2017.

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(19) The grant will compensate damage caused by COVID-19 accrued by SLH between 1 March and 30 September 2020.

(20) The estimated damage suffered by SLH is NOK 134 480 000 (see section 3.6). Therefore, the aid intensity is estimated to be approximately 66.9%.

3.6 Eligible costs and modalities of compensation (21) The eligible costs correspond to the damage caused by the COVID-19 outbreak to SLH. The damage is defined as the loss of added value.11

(22) The loss of added value will be quantified based on an analysis of the impact of the COVID-19 outbreak, comparing SLH’s operating results during the compensation period with SLH’s operating results for Sandefjord Airport from 1 March to 30 September 2019 (“the reference period”).

(23) The Norwegian authorities note that the effects of COVID-19 were visible already the day after the first cases were identified in Norway, on 26 February. From that moment the traffic declined immediately with 5% in the following days. When the traffic was closed down on 12 March, the traffic at Norwegian airports had already dropped significantly. Therefore, the Norwegian authorities submit that SLH can be compensated for damage suffered from 1 March 2020.

(24) The quantification of the loss of value will take into account the following: (i) loss of revenue: a review of the impact of the COVID-19 outbreak on total revenue, including traffic-related revenue primarily the reduction of passengers; (ii) additional and avoided costs: a review of SLH’s cost base and the impact (both positive and negative) of the COVID-19 outbreak on variable costs, including personnel, security, costs related to service to persons with reduces mobility, and air traffic controls; (iii) loss of profit: an adjustment for the expected margin based on the pre- COVID-19 budget.

(25) The loss of revenue is the difference between the revenue that SLH would have expected, had the COVID-19 crisis not occurred (i.e. the actual revenues of SLH during the reference period in 2019), and the revenue that SLH generates during the compensation period. The loss of revenue will be corrected by the profits that SLH generated in the preceding year.

(26) SLH’s own estimate of experienced and expected traffic in the compensation period is 357 926 passengers. During the same period in 2019, there were 1 306 028 passengers. Therefore, the traffic at Sandefjord Airport during the compensation period has fallen by an estimated 72.6%, compared to the reference period.

(27) According to the Norwegian authorities, SLH also had some additional costs due to COVID-19, like increased revolving credit facilities and postponed payments on

11 See for comparison Commission Decision in case SA.56795 (Denmark) Compensation for the damage caused by the COVID-19 outbreak to Scandinavian Airlines, paragraph 29, and SA.57061 (Sweden) Compensation for the damage caused by the COVID-19 outbreak to Scandinavian Airlines, paragraph 29.

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loans in order to increase liquidity. However, the amounts are so far not quantified, and not significant enough to be included in the calculation of damage.

(28) Avoided costs correspond to costs that SLH would have had if its activity had not been affected by the COVID-19 crisis, and that SLH does not have to bear as a result of the crisis (personnel, security, costs related to service to persons with reduces mobility, and air traffic controls). The avoided costs will be quantified by comparing the costs borne by SLH in the reference period with the costs borne by SLH during the compensation period.

(29) In order to reduce costs, SLH first considered whether it should close down completely all air operations. Based on contacts with the airline Widerøe, SLH decided not to close down completely, but to reduce its activity to the absolute minimum required for the base functions Widerøe has on SLH (see paragraph 6). Widerøe has both a technical base and a crew base at Torp. Both are vital for the operation of commercial operations of the aircraft Dash-8 400 in Norway.

(30) On 31 March, the opening hours were reduced to three hours in the morning and three and a half hours in the evening on weekdays, on Saturdays 08:30-10:00 and 17:00-18:10, and Sundays open 18:00-21:30. At the end of June and beginning of July, the opening hours have been slightly prolonged on some weekdays in order for the airlines to operate their flights. A further increase in opening hours will probably be needed from week 34 onwards.

(31) SLH temporarily furloughed 80% of their operative personnel on 31 March 2020. As of 30 July 2020, 72% of their operative personnel is still temporarily furloughed.

(32) Operating cost are estimated to be reduced with 31% compared with the budget; from NOK 207 678 000 to NOK 142 989 000 in the compensation period, due to the measures taken in response to COVID-19. For the month of April, operating costs were reduced from the budgeted NOK 31 371 000 to NOK 12 656 000, a reduction of 60% for this month. This shows that, to the extent that it has been possible to combine with a gradual re-introduction of air operations, drastic measures have been taken.

(33) Security costs were initially reduced to an absolute minimum when flights were cancelled as the Government measures were introduced. The COVID-19 outbreak has also required extra personnel, thus increasing the variable costs.

(34) As for personnel providing assistance to persons with reduced mobility (PRM), some has to be present at the airport during opening hours as approximately 40% of those in need of these services are unscheduled. Consequently, costs related to this service cannot easily be reduced any further.

(35) Furthermore, the SLH has cut expenses related to electricity, IKT, advertising, inventory, transport, maintenance, re-negotiated contracts and introduced a policy of not purchasing anything that is not urgent.

(36) To be able to compete on the limited remaining traffic/demand in the Norwegian air transport market, SLH has relinquished ordinary airport charges to be paid by the airlines for its use of the airport. According to the Norwegian authorities, this is an indirect consequence of the Ministry of Transport’s decision to release the

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airlines from their duty to pay charges on all Avinor airports from 13 March 2020. The Ministry does not regulate the airport charges on SLH and SLH has not been compensated for waving these fees.

(37) On the basis of the above, the Norwegian authorities estimate SLH’s losses, related to the COVID-19 outbreak, to be NOK 134 480 000. Therefore, the NOK 90 million grant will only cover a part of the net losses suffered by SLH due to the COVID-19 outbreak during the compensation period.

(38) The actual damages to SLH will be assessed after the COVID-19 crisis, based on operating accounts duly certified and audited by an independent body for the year 2020.

3.7 Commitments (39) The Norwegian authorities commit to carry out, no later than 30 June 2021, an ex post assessment of the damage suffered by SLH as a result of the COVID-19 outbreak, quantifying the damage precisely, based on the operating accounts of SLH for the year 2020, audited and duly certified by an independent body.

(40) The Norwegian authorities commit to submit to ESA, no later than 30 June 2021, the results of the analysis of the ex post assessment of the damage suffered by SLH, and the amount of aid granted.

(41) The Norwegian authorities commit to ensure that SLH repays any over- compensation, should the ex post assessment show that the total state aid received by SLH to compensate the damage suffered as a direct consequence of the COVID-19 outbreak exceeds the actual loss. The Norwegian authorities confirm that the payment made to SLH shall be net of any amount recovered by insurance, litigation, arbitration or other source for the same damage. If the aid is paid out before the insurance, the authorities will recover the insurance amount.

(42) The Norwegian authorities commit not to grant aid to SLH if it is responsible for the damage suffered and/or did not conduct its activities with due diligence or in compliance with applicable legislation, or did not take any measure to mitigate its damages.

3.8 Cumulation (43) The aid cannot be cumulated with aid covering the same eligible costs.

(44) SLH is qualified for compensation according to Norwegian Regulation No 820 of 17 April 2020 on grant scheme for undertakings suffering a substantial loss of turnover (approved by ESA in Decision No 039/20/COL). However, SLH has not applied for any aid under this scheme and will be contractually obliged not to apply for or receive any aid from other authorities, covering the same damage as the measure.

4 Presence of state aid (45) Article 61(1) of the EEA Agreement reads as follows: “Save as otherwise provided in this Agreement, any aid granted by EC Member States, EFTA States or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods

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shall, in so far as it affects trade between Contracting Parties, be incompatible with the functioning of this Agreement.”

(46) The qualification of a measure as aid within the meaning of this provision therefore requires the following cumulative conditions to be met: (i) the measure must be granted by the State or through State resources; (ii) it must confer an advantage on an undertaking; (iii) favour certain undertakings (selectivity); and (iv) threaten to distort competition and affect trade.

(47) The decision to appropriate NOK 90 million was taken by the Norwegian Parliament.12 The grant will be disbursed by the Ministry of Transport and is financed through the State Budget. The first condition is therefore met.

(48) By compensating part of SLH’s loss of added value, due to the COVID-19 outbreak, the measure relieves SLH of charges, which are normally borne from its budget and thereby confers an advantage on SLH. Furthermore, the measure is selective, since it is granted to a single beneficiary, namely SLH.

(49) The measure is also liable to distort competition, since it strengthens the competitive position of SLH. It also affects trade between Member States, since SLH is active in the aviation sector, in which there is intra-EEA trade.

(50) In view of the above, ESA finds that the notified measure constitutes state aid within the meaning of Article 61(1) of the EEA Agreement.

5 Procedural requirements (51) Pursuant to Article 1(3) of Part I of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice (“Protocol 3”): “The EFTA Surveillance Authority shall be informed, in sufficient time to enable it to submit its comments, of any plans to grant or alter aid. … The State concerned shall not put its proposed measures into effect until the procedure has resulted in a final decision.”

(52) The Norwegian authorities have notified the measure, which will only enter into force subject to approval by ESA. They have therefore complied with the obligations under Article 1(3) of Part I of Protocol 3.

6 Compatibility of the measure 6.1 Introduction (53) ESA shall declare state aid compatible with the functioning of the EEA Agreement under its Article 61(2)(b), provided that certain compatibility conditions are fulfilled. This provision reads as follows: “The following shall be compatible with the functioning of this Agreement: aid to make good the damage caused by natural disasters or exceptional occurrences”. ESA has no discretion in assessing the compatibility of aid that falls within this category and meets the terms of Article 61(2)(b) of the EEA Agreement.

(54) For all measures taken under Article 61(2)(b), there must be a direct causal link between the aid granted and the damage resulting from the exceptional occurrence for each beneficiary and the aid must be limited to what is necessary to make good the damage.

12 See Innst. 368 S (2019-2020).

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6.2 COVID-19 as an exceptional occurrence (55) Neither the EEA Agreement, nor any EEA relevant legislation contains a precise definition of “exceptional occurrence”.13 Article 61(2)(b) is an exception to the general principle, as stated in Article 61(1), which must be interpreted narrowly.14 The characterisation of an event as an exceptional occurrence is made by ESA on a case-by-case basis. The event must be: (i) unforeseeable or difficult to foresee,15 (ii) of significant scale/economic impact,16 and (iii) extraordinary.

(56) On 9 March 2020, European Commission’s President Ursula von der Leyen made a statement that companies affected by the COVID-19 outbreak would in principle be eligible for state aid under Article 107(2)(b) of the Treaty on the Functioning of the European Union (“TFEU”). On 11 March 2020, the COVID-19 outbreak was classified as a pandemic by the World Health Organisation.17 On 12 March 2020, the European Commission adopted a decision concluding that the COVID-19 outbreak qualifies as an exceptional occurrence for the purpose of Article 107(2)(b) TFEU,18 which corresponds to Article 61(2)(b) of the EEA Agreement, as it is an extraordinary, unforeseeable event having a significant economic impact.19

(57) The spread of COVID-19 ultimately resulted in far-reaching disruption of various economic sectors. That disruption was thus clearly outside the normal functioning of the market. In order to avoid an exponential increase in the number of cases, accompanied by social alarm and severe economic consequences, containment measures needed to be adopted. Consequently, Governments in all over the world adopted various measures that aimed to limit the spread of the coronavirus, e.g. travel restrictions for non-essential travels, closure of borders, closure of non- essential shops, obligation for companies to organise working from home for every position where this is possible and various social distancing measures.

(58) In view of the above, the COVID-19 outbreak qualifies as an exceptional occurrence, as it was not foreseeable and is clearly distinguishable from ordinary events, by its character and its effects on the affected undertakings and the economy in general, and therefore falls outside the normal functioning of the market.

(59) Consequently, ESA considers the COVID-19 outbreak as an exceptional occurrence within the meaning of Article 61(2)(b) of the EEA Agreement.

13 See also See Commission Decision in SA.56685 C(2020) 1698 final (Denmark) Compensation scheme for cancellation of events related to COVID-19, paragraph 24. 14 See Commission Decision in SA.32523 C(2012) 4218 final (Cyprus) Compensation scheme for air carriers registered in Cyprus for additional costs linked to the impossibility to overfly the Turkish airspace, paragraph 50. See also Commission Decision in SA.56685 C(2020) 1698 final (Denmark) Compensation scheme for cancellation of events related to COVID-19, paragraph 24. 15 Commission Decision in SA.32163 C(2011) 5495 final (Slovenia) Remediation of damage to airlines and airports caused by seismic activity in Iceland and the volcanic ash in April 2010, paragraph 31. 16 Commission Decision in SA.33487 C(2012) 2447 final (Hungary) Agricultural and fisheries aid to compensate for damage due to exceptional occurrence, paragraph 36. 17 WHO Director Generals opening remarks at the media briefing on COVID-19 on 11 March 2020. 18 Which corresponds to Article 61(2)(b) of the EEA Agreement. 19 Commission Decision in SA.56685 C(2020) 1698 final (Denmark) Compensation scheme for cancellation of events related to COVID-19, paragraphs 26–30.

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6.3 Causal link between the exceptional occurrence and the measure (60) Only damage caused by the exceptional occurrence may be compensated for under Article 61(2)(b).20 In the case at hand, there is a direct link between the damage caused by the exceptional occurrence and the state aid.

(61) As described in paragraphs (3) and (4), the COVID-19 outbreak has resulted in travel restrictions all over the world and the close-down of the vast majority of passenger air transport. Those containment measures were intended to avoid the spread of the virus, but negatively affected the aviation sector, including most airports.

(62) The damage suffered by SLH is directly linked to the COVID-19 outbreak through the travel restrictions and other containment measures imposed by the Norwegian authorities (as well as other national authorities around the world) which led to a sudden and lasting reduction of flights at Sandefjord Airport.

(63) As regards compensation for the period of time before general measures were enacted in Norway, i.e. 1 to 12 March, the Norwegian authorities have noted that the effects of the COVID-19 outbreak materialised already in the beginning of March 2020. ESA sees no reason to doubt this assertion, since the spread of COVID-19 started before 12 March 2020 and traffic was already down for Norwegian airports at that time.

(64) Furthermore, ESA and the Commission have already concluded that they expect operations of airlines to be heavily impacted by the lock-down measures taken by various Governments worldwide until the end of 2020.21 ESA similarly finds that COVID-19 is likely to continue to impact airports servicing those airlines, including SLH.

(65) Consequently, ESA concludes that there exists a direct causal link between the damage suffered by SLH during the period from 1 March to 31 December 2020 and the exceptional occurrence, i.e. the COVID-19 outbreak.

6.4 Proportionality (66) In order to be compatible under Article 61(2)(b) of the EEA Agreement, the aid must be proportional to the damage caused by the exceptional occurrence. Aid must not result in overcompensation of damage and should only make good the damage caused by the exceptional occurrence.

(67) ESA considers the measure as proportionate for the following reasons.

(68) First, ESA notes that at this stage, the COVID-19 crisis is still ongoing, and its full impact on SLH’s operations is not yet known. Therefore, the Norwegian

20 See Commission Decision in SA.32163 C(2011) 5495 final (Slovenia) Rectification of consequences of the damage caused to air carriers and airports by earthquake activity in Iceland and the resulting volcano ash in April 2010, paragraph 34. 21 See for example Commission Decision in SA.56867 (Germany) Compensation for the damage caused by the COVID-19 outbreak to Condor Flugdienst GmbH, paragraph 77 (not yet published), ESA Decision No 089/20/COL (Norway) COVID 19 – Amendment and renewal of the guarantee scheme for airlines, inter alia paragraphs 47-48, and Commission Decision in SA.57061 (Sweden) Compensation for the damage caused by the COVID-19 outbreak to Scandinavian Airlines, paragraph 59. See also ESA Decision No 097/20/COL (Norway) COVID-19 Compensation to Haugesund Airport.

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authorities are not currently in a position to quantify precisely the damage suffered by SLH. The estimated damage of SLH is established based on the general methodology set out in section 3.6 above.

(69) Under the methodology, the damage is defined as the loss in added value in the compensation period as compared to the reference period. The damage is calculated according to the following principle: loss of revenue (corrected for the margin), minus avoided costs (see section 3.6). A version of this methodology for calculating damage has been accepted in previous cases.22

(70) Using this calculation methodology, the Norwegian authorities have estimated the damage suffered by SLH in the period of 1 March to 30 September 2020 to be NOK 134 480 000. The aid to be granted to SLH under the measure is NOK 90 million, or approximately 66.9% of the estimated damage. Therefore, the aid under the measure is significantly below the maximum allowed aid under Article 61(2)(b) EEA, which is 100% of the damage caused by the exceptional occurrence. This makes overcompensation to SLH highly unlikely.

(71) However, since the calculation of damage is an estimate, SLH will be obliged at a later stage to present actual figures, confirmed by an external auditor, so that the actual damage can be calculated. The Norwegian authorities have committed to carry out by 30 June 2021 an ex post assessment of the damage suffered by SLH as a result of the COVID-19 outbreak, based on the operating accounts of SLH for the year 2020, audited and duly certified by an independent body. Furthermore, the Norwegian authorities have committed to submit to ESA the results of the analysis of the ex post assessment of the damage suffered by SLH, and the amount of aid granted. SLH is contractually obliged to repay any overcompensation based on the damage principles of EEA Article 61(2)(b) to the Norwegian authorities, should the damage prove lower than NOK 90 million. This mechanism secures that overcompensation is avoided.

(72) Consequently, ESA concludes that the methodology used to calculate the damage is appropriate.

(73) Second, ESA notes that payment made to SLH will be net of any amount recovered by insurance, litigation, arbitration or other source for the same damage. If the aid is paid out before the insurance, the authorities will recover the insurance amount. Moreover, SLH will not receive aid for damage that they are responsible for due to lack of due diligence, compliance with applicable legislation, or measures to mitigate its damages.

(74) Consequently, ESA concludes that the measure is proportionate.

7 Conclusion (75) On the basis of the foregoing assessment, ESA considers that the measure constitutes state aid with the meaning of Article 61(1) of the EEA Agreement. Since no doubts are raised that this aid is compatible with the functioning of the EEA Agreement, pursuant to its Article 61(2)(b), ESA has no objections to the implementation of the measure.

22 See for example the Commission’s Decision in SA.57061 (Sweden) Compensation for the damage caused by the COVID-19 outbreak to Scandinavian Airlines, paragraphs 64 and 65.

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(76) The Norwegian authorities have confirmed that this decision does not contain any business secrets or other information that should not be published.

For the EFTA Surveillance Authority,

Yours faithfully,

Bente Angell-Hansen Frank J. Büchel Högni Kristjánsson President College Member College Member Responsible College Member

Carsten Zatschler Countersigning as Director, Legal and Executive Affairs This document has been electronically authenticated by Bente Angell-Hansen, Carsten Zatschler.