European Commission launches state aid investigation at Leipzig/Halle airport
The European Commission (EC) has opened an in-depth investigation over EUR 255m of funding provided to the Leipzig/Halle airport – the home of DHL Express. An inquiry is required to verify whether loans and capital injections used to finance infrastructure projects at the airport comply with EU state aid rules.
The EC currently considers that Germany has failed to demonstrate that the public funding was justified and proportionate.
There are concerns that the finance may have given the airport an “unfair advantage”.
In April 2010, Germany notified for legal certainty the public financing of new infrastructure measures at the airport. The infrastructure projects included: noise abatement measures, creation of de-icing areas, construction of taxiways and bridges, extension of aprons and hangars, construction of a new aviation terminal and small aircraft shed, planning costs for the extension of the southern and northern runways, functional security buildings and checkpoints.
To fund these measures, the airport received EUR 255m from public shareholders (mainly Freistaat Sachsen, and Land Sachsen-Anhalt).
As some of the investments started in 2006, the airport operator, Flughafen Leipzig/Halle GmbH, has also received loans from its public shareholders, the EC stated.
“Germany takes the view that the construction of the infrastructure at the Leipzig-Halle airport is not economically viable and is of a safety and security nature. It claims that as no private investor would finance this infrastructure, it does not constitute an economic activity in the meaning of EU state aid rules,” the EC said in a statement.
“However, a ruling by the European Union’s General Court, on 24 March 2011, confirmed the Commission’s view that the operation of an airport is an economic activity, of which the construction of airport infrastructure is an inseparable part.
“The Commission is of the opinion that the notified measures are essential for economic activities undertaken by the airport operator and thus allow the airport to exercise its primary economic activity. The Commission has, therefore, doubts that the investment project falls under the public policy remit. As the capital increases were undertaken without an underlying business plan or assessment of the long-term prospects for profitability, the Commission takes the preliminary view that they involve state aid. The Commission also has doubts that the shareholder loans were granted at market rates.
“The Commission, therefore, has doubts whether the financing of the notified infrastructure measures can be considered compatible with EU state aid rules, and in particular the 2005 EU Guidelines on the financing of airports and start-up aid to airlines from regional airports. The Commission considers that a large regional airport as Leipzig/Halle should be able to finance at least part of its infrastructure costs and that the aid is neither proportionate nor limited to the minimum necessary,” the Commission added.
The Leipzig-Halle airport serves approximately 2.7m passengers and, since the construction of the southern runway in 2008, is the European hub of DHL Express.
Approximately 524,000 tonnes of cargo were transported to and from the airport in 2009.
The Commission has started a review of the 2005 EU Guidelines on the financing of airports and start-up aid to airlines from regional airports. The consultation period ended on 7 June and the Commission is currently analysing submissions from stakeholders and Member States, it said.
