The European Commission has approved €11.7 million in State aid granted to Carcassonne Airport’s manager for the period 2001-2011, but orders France to recover about €1.8 million in incompatible aid related to Ryanair agreements.
The decision stems from a Commission investigation initiated after a complaint and covers investment, operating, marketing and airport service contracts.
The aid includes €9 million for infrastructure investments and €2.7 million for operating support to the Chamber of Commerce and Industry of Carcassonne-Limoux-Castelnaudary (CCI). The €1.8 million to be recovered arises from 11 marketing and airport services agreements judged to confer undue advantage on Ryanair under EU State aid rules. France must also pay interest on the sum to remove competition distortions.
Approved Aid Meets EU Aviation Guidelines
The Commission found that the total €11.7 million in subsidies, mainly from local and regional authorities, complied with EU Aviation Guidelines. It concluded the support was “necessary and proportionate” since it contributed to the modernisation of the airport and helped finance operating costs without generating excessive profits. Nearby airports such as Castres-Mazamet, Perpignan, Béziers and Toulouse-Blagnac are not unduly distorted by the aid, the Commission added.
The infrastructure investment aided runway, terminal or safety improvements, while the operating support covered general costs of running the facility. The investigation also noted that €1.1 million of the subsidies had been used for non-market functions like firefighting and customs control, which are outside the scope of state aid rules.
Incompatible Agreements with Ryanair Require Recovery
CCI had signed 11 agreements with Ryanair and its subsidiary AMS covering marketing services and airport/route commitments. The contracts included obligations for traffic targets and setting certain passenger charges, combined with higher marketing fees. The Commission applied the market economy operator test (MEOP) to 16 of these agreements, finding 11 of them conferred an advantage to Ryanair based on negative net present value for the airport.
The advantage to Ryanair amounts to approximately €1.8 million. France must recover that sum, plus interest, to restore competition conditions that existed prior to the agreements. The Commission emphasises that recovery is not a penalty but intended to remove the undue advantage.
The decision follows an in-depth investigation by the Commission, started on 4 April 2012, into whether CCI’s agreements with Ryanair and local government funding complied with EU State aid law. The probe assessed whether private operators in similar situations would have accepted the terms under market conditions.
