EN E-004401/2020 Answer given by Executive Vice-President Vestager on behalf of the European Commission (10.9.2020)

EU State aid rules offer a wide range of possibilities for Member States to support companies hit by the coronavirus outbreak, also in the aviation sector. In the context of the economic response to the pandemic, the Commission adopted a State aid Temporary Framework, which enables Member States to ensure sufficient liquidity is available to companies and to preserve business continuity during and after the crisis. The State aid may also take the form of a recapitalisation, and the Commission has already approved several aid measures to recapitalise airline companies (Finnair,1 AirBaltic,2 Lufthansa,3 Nordica4).

It is up to Member States to design aid measures (including whether to impose conditions to the State aid relating to the preservation of jobs), provided that such measures comply with State aid rules and the provisions of the Treaty. It is then for the Commission to assess the compatibility of aid measures. Under the Temporary Framework, the Commission verifies notably that: i) the aid is necessary and proportionate; ii) Member States receive an appropriate remuneration for their investment; iii) Member States are incentivised to exit the company as soon as possible; iv) undue distortions of competition in the Single Market are avoided. There are no conditions imposing a reduction of staff.

Companies that were in difficulties already on 31 December 2019 may be eligible for restructuring aid,5 including through recapitalisation or financial restructuring. In that case, the Commission assesses, among other conditions, whether the restructuring plan of the company submitted by the Member State is able to restore the long-term viability of the beneficiary so as to stand in the marketplace without the need for continued State support.

1 Decision of the Commission of 18 May 2020 in case SA.57410 – Finnair recapitalisation, not yet published. 2 Decision of the Commission of 3 July 2020 in case SA.56943 – AirBaltic, not yet published. 3 Decision of the Commission of 25 June 2020 in case SA.57153 – Lufthansa recapitalisation, not yet published. 4 Decision of the Commission of 12 August 2020 SA.57586 – Aid to Nordica, not yet published. 5 Communication from the Commission – Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty (OJ C 249, 31.7.2014, p. 1).