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HomeSupport study for the evaluation of the rules for operating aid under the EU aviation framework
Final report
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This study aimed to assess whether the State aid rules on operating aid to regional airports set out in the 2014 Aviation Guidelines remain fit for purpose. First, the existing literature provides evidence that air traffic has a positive impact on regional development, especially in the service industries. The effects seem to be more pronounced for the most remote and economically depressed areas. Second, while the transitional period (2014-2024) for the phasing out of aid seems adequate for regional airports with more than 700,000 passengers per annum; many airports below this threshold will not be able to cover their operating costs by 2024, mostly the smallest ones. In fact, using survey data at the airport level, this study finds that all larger airports and a majority of airports with annual passengers between 200,001 and 700,000, should be able to fully cover their operating costs by 2024. On the contrary, only 38% of the airports up to 200,000 passengers are expected to cover their operating costs by 2024, although this group falls under the General Block Exemption Regulation since 2017 and is not exposed to the phasing out of operating aid. Third, current maximum aid intensity regimes seem appropriate for the majority of airports: in fact data shows that actual funding needs are expected to exceed maximum aid entitlement only for 23% of all airports between 200,001 and 700,000 passengers (these are also the airports that are not expected to reach equilibrium by 2024). Fourth, the analysis shows that passengers are an important predictor of profitability. Other determinants of profitability may provide additional insights, but most of them (e.g. the share of low-cost carriers) depend on airports’ strategical choices. Therefore, they may be more apt to condition aid upon and be less suitable to help defining the need of aid. Finally, the evidence suggests that a finer passenger-based categorization might be a better predictor of airports’ ability to cover operating costs.
- Published:
- Corporate author(s): Directorate-General for Competition (European Commission) , Lear , DIW Berlin , SheppardMullin
- Themes: Competition policy , Air and space transport , Transport infrastructure
- Subject: 2891 , 75 , airport , innovation , low cost airline , operating cost , regional development , sample survey , State aid
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| ISSN | ISBN 978-92-76-18434-8 | DOI 10.2763/070570 | Catalogue number KD-03-20-291-EN-N |
- Released on EU publications website:
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