European aviation industry urges EU to update COVID-19 state aid framework

European airports and tourism organisations have made an urgent appeal for changes to the European Union’s (EU) COVID-19 state aid framework, arguing that, without it, these collapsing industries will suffer irreversible damage in a constantly deteriorating situation.

The distress call came by way of a letter sent on 19 January 2021 by Airports Council International (ACI) Europe and the European Travel Commission (ETC) to European Executive Vice-President and Commissioner for Competition, Margrethe Vestager.

It was sent on the very same day that the European Commission (EC) acknowledged that “travel will continue to pose a particular challenge” in the fight against the COVID-19 pandemic. The EC also echoed the recent European Centre for Disease Prevention and Control (ECDC) advice against non-essential travel “until the epidemiological situation has considerably improved, particularly in the light of the outbreak of new variants”.

The letter points to the tightening of travel restrictions by European states as preventing any recovery in passenger traffic and reveals yet steeper falls in air connectivity across Europe, as another 700 air routes have disappeared from European airports since the end of November 2020. This brings the total figure of lost air routes to nearing the 7,000 mark. 

The associations also warn of further downward forecasts in air passenger traffic volumes for the months ahead. ACI Europe has revised its 2021 passenger traffic forecast to a fall of 56 per cent for the year at Europe’s airports in the baseline scenario (down from 43 per cent in the previous forecast). This coincides with EUROCONTROL’s revised forecast of a full recovery not foreseen until 2026.

Against such a dramatic outlook, ACI Europe and ETC are urging Commissioner Vestager to come up with more flexible and more effective state aid rules that would enable states to provide the financial assistance needed by airports and to support air connectivity.

Olivier Jankovec, Director General of ACI Europe, commented: “The Commission’s current COVID-19 state aid framework is no longer fit for purpose when it comes to airports. It involves limitations and conditionalities that are very hard to comprehend and that are simply unacceptable given the situation we are now facing – not to mention the fact that airlines have already been granted almost 15 times more financial aid than airports so far”. 

Executive Director of ETC, Eduardo Santander, said: “What we are asking for is only the support which is proportionate to the severity of the crisis and the outlook we now face. This is about making sure that the aviation infrastructure does not suffer irreversible damage, which would, in turn, create an instant ripple effect through the tourism ecosystem and the local communities dependent upon them. We need urgent action – every day counts”.  

Three core asks are set out to the European Commission, namely:

1. The possibility for airports to obtain full compensation for damages due to COVID-19 and for as long as travel restrictions remain in place
2. The possibility for airports to be compensated for unrecovered fixed costs for as long as travel restrictions remain in place – without any cap or limitation as regards to total amounts
3. The possibility for airports to benefit from Air Connectivity Restart Schemes – whereby states can provide a direct per passenger subsidy to airlines restarting air routes previously operated or launching new air routes – similar to the successful Cyprus scheme. These schemes could play an essential role in supporting the revival of the tourism sector.