European Commission : State aid: Commission approves public service aid to Sundsvall Timra and Skelleftea airports in Sweden

The European Commission has found Swedish plans to grant compensation for public service obligations linked to the management of two regional airports to be in line with EU state aid rules.

The public funding will contribute to facilitate regional connectivity and development without unduly distorting competition in the Single Market.

Commissioner Margrethe Vestager, in charge of competition policy, stated: 'Sundsvall Timra and Skelleftea airports operate in Vasternorrland and Vasterbotten, two sparsely populated areas of Sweden. The Commission found that the compensation they receive is necessary to connect citizens and businesses from these two areas with the rest of Sweden and the EU. '

Sundsvall Timra airport and Skelleftea airport are important to connect two sparsely populated regions in northern Sweden with the rest of the EU. Due to their location, they generate only moderate passenger traffic, which is insufficient to cover their fixed costs. The airports are therefore operating at a loss.

Sweden notified to the European Commission its plans to entrust the two airports with the operation of a service of general economic interest (SGEI) requiring the operators to manage the airports in a way that allows them to receive all airlines that wish to fly to and from these airports. The local authorities who own the airports would grant the operators compensation to cover the annual losses linked to fulfilling this SGEI until December 2023. This compensation will cover costs that other airports normally have to bear on their own and therefore involves state aid within the meaning of the EU rules.

The 2014 Guidelines on State aid to airports and airlines (the 'Aviation Guidelines') allow the award of a SGEI compensation for the management of an airport, provided it serves areas that would otherwise be isolated from the rest of the EU to an extent detrimental to their development.

The Commission's investigation found that the lack of acceptable connections between Vasternorrland County and Vasterbotten County with Stockholm and the rest of Europe would significantly harm the standard of living of inhabitants of these areas and would significantly reduce the regions' activities and business outlook. This would seriously hamper the social and economic development of these areas. In line with the Aviation Guidelines, the Commission also ensured that the compensation cannot be used to subsidise any airline aiming at developing commercial air transport services.

This is the first time that the Commission has assessed a SGEI for the management of an airport applying jointly the criteria of the Aviation Guidelines and the 2012 SGEI Framework.

Background

Sundsvall Timra airport is located in Vasternorrland County. Skelleftea airport is located in Vasterbotten County. Both regions are on the outskirts of the EU and are characterised by low population density (respectively 11.2 and 4.8 inhabitants/km), which is significantly below the EU average of 116 inhabitants/km. Each of the two airports serves annually around 300 000 passengers.

EU State aid rules allow Member States to grant aid in the form of SGEI compensation to airports that have an important role to play in terms of regional connectivity of isolated, remote or peripheral regions of the EU. The overall management of an airport can be qualified as a SGEI if, without this airport, part of the area that it serves would be isolated from the rest of the EU to an extent that would hamper its social and economic development. In such cases, State aid can be granted to enable an airport to discharge such an SGEI. The assessment depends on the characteristics of each airport and of the region that it serves. The conditions for granting such aid are set out in the Aviation Guidelines (see the press release and the factsheet) and in the rules on SGEI.

Compensation granted to airports with less than 200 000 passengers on average annual traffic over the duration of the SGEI entrustment need not be notified to the Commission for prior state aid scrutiny, provided that it complies with the criteria regarding entrustment and compensation set out in the 2012 SGEI Decision.

Other SGEI compensation, notably to airports exceeding the traffic threshold of 200 000 passengers a year, needs to be notified to the Commission prior to its implementation. The Commission will then assess, whether the measure complies with the criteria of the 2012 SGEI Framework.

The non-confidential version of the decisions will be made available under case numbers SA.38757 and SA.38892 in the State Aid Register on the DG Competition website, once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.