30 January 2015
Question for written answer
to the Commission
Alfred Sant (S&D)
Subject: Commission ruling on state aid to Cyprus Airways
— Having regard to the Commission’s decision to ask for the recovery of state aid to Cyprus Airways in full knowledge that this request would trigger the liquidation of the airline,
— Having regard to the fact that peripheral islands, whether Member States or regional entities belonging to larger Member States, need to maintain multiple and durable — even if subsidised — connections with the mainland for economic and social reasons, even when such connections are not necessarily viable in the open market but are necessary to reaffirm that these islands belong to the single European market,
— Having regard, moreover, to the fact that the traffic generated by such airlines operating from peripheral islands, and with origins in public or private entrepreneurship from the island community, accounts for a minimal percentage of overall EU air transport business, and therefore that state aid of any sort to their operations does not create disturbances in the European transport market:
Should not the Commission consider adopting more flexible methods when evaluating state aid and support to air and sea transport links comparable to those of Cyprus Airlines, in the interests of ensuring that ongoing economic activity in peripheral island markets is maintained or even enhanced?
19 March 2015
Answer given by Ms Vestager on behalf of the Commission
The Commission concluded its three formal investigations concerning the state aid provided to Cyprus Airways by issuing a final decision on 9 January 2015(1). The Commission found that the aid provided to Cyprus Airways gave the company an undue advantage over its competitors in breach of EU State aid rules for rescue and restructuring aid. Cyprus Airways therefore needs to pay back all incompatible aid received.
Rescue and restructuring aid is particularly distortive and requires close scrutiny and strict conditionality. It is thus not appropriate for ensuring transport links to and from peripheral islands. Member States wishing to ensure operation of air transport routes considered vital for economic and social development may use the possibility to establish public service obligations meeting the requirements of the EU’s air services regulation (Regulation 1008/2008).
As regards the consequences of the negative decision for Cyprus’ connectivity, Cyprus Airways’ share of air traffic to/from Cyprus has been relatively limited in recent years (around 12% in 2014). Several other airline companies operate to/from Cyprus. Therefore, even without Cyprus Airways, Cyprus should remain connected to many international hubs. Finally, several operators have already publicly announced their intention to increase their activities in Cyprus.
(1) Cases SA.35888 — Rescue aid to Cyprus Airways, SA.37220 — Restructuring aid to Cyprus Airways and SA.38225 — Training aid to Cyprus Airways.