• the fire service is defined by reference to the standards of the International Civil Aviation Organisation57,
• the maintenance service is defined as ‘technical maintenance services for buildings, runways, surrounding areas, vehicle fleet, etc.’58, and as ‘maintenance of land, buildings and building facilities, and equipment forming part of the concession or placed at the disposal of the concession, such that they are always fit for their intended purpose’59.

Amendment No 5 of 10 March 2006 to the Region/BSCA agreement amended Article 3.2.2 of this agreement as follows: ‘The following shall be annually included in the Walloon Region's budget: … the financial compensation granted by the Walloon Region to BSCA for the costs of providing the fire protection and ground traffic and airport site safety services, in accordance with the conditions laid down by Article 25 of the schedule of conditions annexed to this agreement’.

Amendment No 5 also amended Article 25 of the schedule of conditions. The amended Article 25 provides that: ‘the ground traffic and airport site safety services include routine maintenance of the airport site, technical maintenance services for buildings, runways, surrounding areas and vehicle fleet, minor surfacing work, routine maintenance and repair of the runway and accesses, operational maintenance and servicing of the general lighting and runway lighting, mowing services, rubber removal from the runway and its markings, snow clearance and any other services ensuring the safety of ground traffic, airport site and infrastructures, except for commercial areas of the airport zone’.

Under Article 25 of the schedule of conditions, the financial compensation was capped at EUR 5 774 000 for 2006. This cap was annually indexed until 31 December 2009. The amount of the financial compensation was to be revised no later than the second half of 2009.

Moreover, Article 25.7 of the schedule of conditions, introduced by Amendment No 5 of 10 March 2006, provides that the amount of the compensation may not exceed the actual costs incurred by BSCA and that any overcompensation of the costs will result in budgetary compensation through the budget entry for the following year.

Flight tracking and recording involve adding information on flights (number of passengers, aircraft registration, name of pilot, type of aircraft, nature of flight, origin, weight of aircraft, etc.) to the database of the Walloon administration. Flight planning involves communications, flight plans, slots, radio announcements and management of aircraft parking stands. Flight tracking and recording and flight planning are provided by the ‘navigation office’.

Marshalling consists of two tasks, namely marshalling on stand, which is carried out by the area coordinator when an aircraft arrives, and follow me marshalling, which involves guiding the aircraft with a vehicle. This service is used only for pilots who are unfamiliar with the airport (business aviation) or for Category D large aircraft. At Charleroi airport, the number of such operations is very limited (maximum of 100 per year).

• with regard to the fire protection and ground traffic and airport site safety services, the Region assumed the costs of their provision under the same terms as those defined by Amendment No 5 (see recital 75) up to 31 December 2009; the parties were to reassess the amount of the compensation no later than during the second half of 2009,

• with regard to the flight tracking and recording, provisional flight planning, marshalling and security services63, the Region assumed the costs of these services for the years 2008 and 2009. Since 1 January 2010, this assumption of costs has been capped at the indexed amount of the compensation paid for the previous year.

Article 25.7 of the schedule of conditions has been amended and provides that the amount of the compensation may not exceed the actual costs incurred by BSCA, after deducting any fees collected from users to cover these services.

According to BAC, any investment aid granted to BSCA was not limited to the minimum necessary. This is because BSCA's payment for the concession and infrastructure remained constant between 2002 and 2010, apart from a step up in 2007, while passenger numbers and revenues increased over the same period. This resulted in an increase in the average net value of the infrastructure for BSCA, whereas average net payments decreased.

With reference to the services provided by SOWAER to BSCA and the services reimbursed by the Region to BSCA, BAC submits that, apart from public services such as police and customs, the Belgian State does not pay for any other activities at Brussels airport. BAC bears the cost of fire services, safety and maintenance itself. The flight tracking, recording and planning services provided by Belgocontrol are paid for directly by the airlines using Brussels airport. At Charleroi airport, airlines do not have to pay for these services. As such, the services reimbursed by the Region to BSCA do not relate to the exercise of public power.

BAC considers that these services do not constitute services of general economic interest as they are inherent in the operation of an airport and in the essential aspects of the economic activities of an airport and do not meet the Altmark criteria.

BAC considers that the payments made to reimburse BSCA for these services are not in accordance with the MEIP and constitute operating aid. As the payments made by BSCA to the Region for the use of the infrastructure are less than what a private investor would find acceptable, such an investor would not agree to additional payments being made for services without a corresponding return.

BAC points out that operating aid can be declared compatible only under exceptional circumstances and under strict conditions in disadvantaged regions. None of these conditions is met in the case of Charleroi airport and the aid cannot be regarded as compatible with the internal market.

BAC doubts whether the BSCA capital increase of 3 December 2002 complied with the MEIP. BAC further points out that, when assessing whether the capital increase would have been made by a private investor, other aid measures from which BSCA benefits should not be taken into account.

BAC submits that the aid measures have allowed Charleroi airport to strengthen its competitive position in relation to other airports and other means of transport such as high-speed rail, as they enable BSCA to apply low airport charges. This creates a significant disparity between the fees at Brussels airport and at Charleroi airport, particularly due to differences between the passenger fees and safety fees. The airport charges collected by BSCA are below market price in comparison with Brussels airport and other comparable airports in the Charleroi airport catchment area, such as Eindhoven, Lille and Cologne/Bonn airports.

According to BAC, this difference has resulted in a loss of 2,5 million passengers over the 2004-2011 period. The growth of Charleroi airport is not purely the result of additional traffic that Brussels airport has failed to generate, as proven by the fact that the average annual growth of a reference sample of European airports was 20,5 % between 2005 and 2011, whereas traffic at Brussels airport remained constant. In addition, the increase in destinations and frequencies at Charleroi airport has led to a corresponding loss of destinations or reduction in frequencies at Brussels airport.

BAC believes that the investment aid received by BSCA constitutes State aid that must be regarded as incompatible with the internal market because it is not proportional to objectives of common interest (Brussels airport was not congested) and is not limited to the minimum necessary.

Brussels Airlines submits that fire, maintenance, safety and security services, and services associated with landing, take-off and infrastructure do not fall within its public service tasks but form part of the economic activity of managing an airport and should not be subsidised in a discriminatory manner. They cannot be regarded as services of general economic interest. Brussels Airlines submits that other industries in the Region finance their own fire services, as does Brussels airport. As the Region covers the safety and security costs at Charleroi airport, BSCA does not recover these costs from airlines, whereas no compensation has been given to Brussels airport for these costs. Passengers departing from Brussels airport are also subject to the Belgian Civil Aviation Authority fee, whereas passengers departing from Charleroi airport are not.

Brussels Airlines does not believe that the Region/SOWAER were behaving as a private operator in a market economy when giving support to BSCA. BSCA's profitability appears inflated due to subsidies, grants and compensatory measures, without which it would have a consistently negative profit margin. Brussels Airlines also questions whether the combined profitability of BSCA and SOWAER reflects market-driven practices. Brussels Airlines submits that the Region is not acting as a private investor given that such an investor would not invest in a structurally loss-making company.

Between 2004 and 2012, whilst the number of short-haul passengers using Charleroi airport tripled, the number using Brussels airport stagnated, given that this figure was the same in 2012 as in 2004. Brussels Airlines adds that the number of passengers that it carried fell from […] million to […] million. Given these findings and the fact that, when viewed as a whole, airport passenger numbers increased by 34 %, Brussels Airlines concludes that Charleroi airport benefited from all the growth. Brussels Airlines notes that from 2004 to 2007 other European airports experienced strong growth (over 20 %), but the growth at Charleroi airport is not explained solely by the increase in traffic, but also by the fact that a large number of passengers who previously used Brussels airport appeared to choose Charleroi airport instead. Brussels Airlines puts this loss at […] million passengers per year to the benefit of Charleroi airport, i.e. a loss of revenue estimated at over EUR […] million per year.

Brussels Airlines draws the Commission's attention to the fact that the positive effects expected of State aid policies, such as the development and accessibility of the regions, are uncertain.

• Firstly, the fact that capacity is created whilst other capacity still exists results in the inefficient duplication of infrastructure. In support of this argument, Brussels Airlines points out that, during the period in question (2000-2012), the capacity available at Brussels airport was sufficient to accommodate more passengers. As an example, in 2011 the capacity of Brussels airport was a maximum of 28 million passengers, although the airport was being used by only 18,8 million passengers. At the same time, Charleroi was being used by 5,9 million passengers, whereas its capacity was between 6 and 7 million. The total capacity of the two airports in 2011 was 24,7 million, i.e. a total capacity below the maximum capacity of Brussels airport alone.

• Secondly, Brussels Airlines points out that the development of activities at Charleroi airport, to the detriment of Brussels airport and Brussels Airlines, has seemingly had a negative social and economic impact. Brussels Airlines compares the direct and indirect added value of Brussels and Charleroi airports from 2007 to 2009. The added value of Charleroi airport is apparently EUR 38 million, whereas that of Brussels airport is EUR 358 million. Brussels Airlines also refers to the number of jobs created directly and indirectly by the airports between 2007 and 2009. Whereas employment at Charleroi airport increased over this period by 589 FTE (full-time equivalents), the number of jobs at Brussels airport fell by 1 057. Whilst the number of passengers at Charleroi airport substantially increased between 2007 and 2009, unlike at Brussels airport, the level of direct and indirect employment did not increase to the point of compensating for the loss of jobs at Brussels airport.

• Finally, according to Brussels Airlines, the absorption phenomenon has had a negative impact on the profitability of traditional airlines to the benefit of the low-cost airlines, whose profitability is mainly due to subsidies. Brussels Airlines states that, whereas the average profitability of the AEA (Association of European Airlines) was low and even negative over the entire period in question (profits before interest and taxes were EUR 0,9 billion in 2000, with a loss of EUR 0,4 billion in 2012), the figure for Ryanair was substantial (profits before interest and taxes were EUR 84 million in 2000 and EUR 617 million in 2012). However, according to Brussels Airlines, this profitability was increased by the subsidies received from the airports. Brussels Airlines states that, without this aid (calculated at EUR 720 million in 2011), Ryanair's profitability would have been substantially lower, and even negative.

In addition, Brussels Airlines points out that the operating aid was granted to Charleroi airport even though (i) this airport is located in the same catchment area as Brussels airport and (ii) the latter still had available capacity. Consequently, according to Brussels Airlines, a business plan based on cargo and passenger traffic forecasts should have identified the potential impact of this airport's development on traffic at Brussels airport. Brussels Airlines stresses that such an assessment was never made. In any event, if such an assessment had been made, it would have shown that an increase in traffic at Charleroi airport would be to the detriment of traffic at Brussels airport. Brussels Airlines states that, in its view, this was in fact the outcome: an increase in market share for Charleroi airport correlated to a drop in market share for Brussels airport and to a reduction in the frequency and/or to the withdrawal of several Brussels Airlines routes. Brussels Airlines therefore reasserts that the operating aid granted to BSCA did not contribute to the achievement of an objective of common interest. In fact, on the contrary, these measures resulted in the misuse and wastage of resources.

Brussels Airlines points out that, in order to benefit from operating aid, the aviation guidelines require the annual traffic of an airport not to exceed 3 million passengers. Brussels Airlines stresses that this threshold was exceeded in 2009. Moreover, Brussels Airlines notes that the operating aid granted to BSCA did not evolve between 2002 and 2008 although, in theory, BSCA should have been capable of covering an increasing proportion of its operating costs. In addition, from 2009 Charleroi airport should have been able to cover its operating costs and was not eligible to receive further operating aid.

According to Brussels Airlines, even if it were proven that Charleroi airport still needed the operating aid in 2008, it was in fact clear that the public financing of BSCA through State aid was an inappropriate policy given that Charleroi airport was not profitable. Moreover, Brussels Airlines points out that the measures in question were all inappropriate because the Region did not, to its knowledge, previously attempt to compare its aid measures with measures that were less likely to hinder competition.

Brussels Airlines notes that Charleroi airport is located in the same catchment area as Brussels airport and that the latter still had available capacity during the period in question. Moreover, Brussels Airlines points out that, while the number of passengers has increased at Charleroi airport, the number at Brussels airport has stagnated and even declined in recent years, despite the fact that air traffic has risen on the whole in all European countries.

BAR briefly notes the nature of the aid in question: operating aid received by BSCA and paid by the Region, ‘in all likelihood transferred to Ryanair, at least in part’.

BAR complains that the Commission, by announcing that it wanted to apply the principles set out in the aviation guidelines ‘to all cases concerning operating aid … to airports even if the aid was granted before 4 April 2014’, infringed the principle of legal certainty and adopted an opposite approach to the one recommended in 2002 in its notice on the determination of the applicable rules for the assessment of unlawful State aid, given that, according to BAR, said notice states that aid must be assessed ‘in accordance with the texts in force at the time when the aid was granted’. Moreover, BAR considers that this change in Commission policy also infringes the principle that reasons must be given, because the Commission does not explain why developments in the aviation sector would have an impact on the assessment of past operating aid, or why only the latter type of aid is covered and not also past start-up or investment aid. In this respect, BAR points out that, if the Commission were to find that aid granted in the past was compatible with the internal market even though the opposite had been found previously, this would infringe not only the general principles referred to above, but also the principles of sound administration and legitimate expectations.

• The aid measures are not necessary: BSCA has exceeded the threshold of 1 million passengers, given that it handles 6 million passengers, and must therefore be able to bear its operating costs. In addition, the operating aid granted in the past cannot be regarded as compatible, given that BSCA had 3 million passengers, or necessary, given that BSCA should have been able to bear its operating costs.

• The aid is and was anti-competitive: according to BAR, given that BSCA is located in the same catchment area as Brussels airport, which had spare capacity, the Region should have taken account of this when granting the aid, which did not happen.

According to BAR, if BSCA considers that aid for the provision of certain public services at the airport must be authorised, then these services must be compared to the same services provided at Brussels airport. However, BAR points out that certain services provided at Charleroi airport are regarded as public services whereas they are not at Brussels airport.

BAR stresses that the collection of airport charges must not lead to a situation of discrimination between users. In particular, BAR refers to the reductions enjoyed by Ryanair on the airport charges and not enjoyed by other airlines established at this airport, and to the fact that the airport charges at Brussels airport are much higher.

BAR notes that, since Brussels airport was privatised, its services are no longer expressly regarded as public services. These services constitute ‘regulated activities’ for which the charges paid by airport users or passengers are controlled according to a formula.

In addition, BAR draws the Commission's attention to the question of cross-subsidisation given that Ryanair operates at both Charleroi airport and Brussels airport. If such cross-subsidisation were found to exist, this would clearly represent a distortion of competition.

According to Brussels Airlines, Ryanair has benefited from a selective advantage compared to other airlines.

The aid granted by the Region and SOWAER to BSCA reduces the latter's operating costs, enabling it to charge lower fees to airlines including Ryanair, in turn reducing the latter's operating costs. In particular, given that the Region covers the safety and security costs of Charleroi airport, BSCA does not recover these from the airlines, whereas Brussels airport has not benefited from any compensation in this respect. Brussels Airlines believes that the Region's comprehensive financial support programme for BSCA must be taken into account when assessing the commercial relationship between BSCA and Ryanair.

Ryanair has also benefited from direct financial measures such as start-up aid and contributions to marketing activities. Brussels Airlines questions whether this aid complies with the conditions laid down by the 2005 guidelines as also the principles of proportionality and transparency.

Brussels Airlines considers that the cumulative effect of all the measures is to make it impossible to believe that BSCA is acting as a private investor, and it invites the Commission not to examine the measures separately, but as a whole.

Brussels Airlines submits that the aid measures have an adverse impact on airlines operating from Brussels airport. The aid measures enable BSCA to charge lower fees and thereby reduce the costs of airlines operating from Charleroi airport. These airlines are able to undercut the prices of competitors operating from other airports. As a result, the European point-to-point market out of Belgium has shifted towards Charleroi airport. Only Charleroi has seen its traffic increase in this segment. The number of passengers using Brussels airport has stagnated in recent years, whereas elsewhere in Europe traffic has increased. In other words, according to Brussels Airlines, the increase in local traffic has been entirely to the benefit of Charleroi airport.

Brussels Airlines reiterates that it is based at Brussels airport and that the latter's catchment area almost entirely overlaps with that of Charleroi airport. As a result, Brussels Airlines is in direct competition with Ryanair: they operate in the same catchment area and attract the same customers. Within the EU market, Brussels Airlines and Ryanair offer the same type of service (point-to-point service) and serve the same destinations. Sixty of the destinations served by Brussels Airlines are also served by Ryanair. Out of 46 destinations, Brussels Airlines is in competition with Ryanair for 16 destinations from the same airport and for 12 destinations from an airport in the same catchment area.

The result of this situation is that Brussels Airlines has had to withdraw certain routes that are also served by Ryanair (7 since 2007) and reduce the frequency of flights on other routes (for 14 destinations). Between 2004 and 2012 Brussels Airlines' market share fell from […] % to […] %. Its market share is continuing to fall to the benefit of Charleroi airport, where the market share has risen from […] % to […] %.

Belgium points out that a considerable part of the major repairs and maintenance cost relates to infrastructures used for non-economic activities.

In 1991 the principle of accounting separation in order to identify the costs covered by the compensation was laid down by Article 25 of the schedule of conditions.

According to Belgium, the Commission never expressed any reservations about BSCA's capital increase until the 2012 extension decision. On the contrary, it explicitly recognised that this operation was carried out in accordance with the private investor principle (see recital 132 of the 2004 decision).

The capital increase carried out by SOWAER presents an internal rate of return (IRR) of 26,09 %, which is similar to the estimate made by Deloitte & Touche in 2003, thus confirming the credibility of this analysis. Given the above, it must be accepted that this investment would undoubtedly have been made by a private investor.

The Commission's assessment of the capital increase, according to which ‘these doubts are reinforced by the finding that BSCA has not borne the cost of the infrastructures placed at its disposal or the various services provided by SOWAER’, is also marred by an error of law. The Commission should individually apply, to each form of intervention, the necessary criteria for assessing their respective regularity and determining, for each intervention, whether aid exists and, if so, whether or not this aid is compatible with the internal market. The philosophy of a capital increase in BSCA in fact differs from the objective of providing airport infrastructure, particularly given the context at the time. The Commission cannot therefore group both types of intervention together in order to determine the overall profitability.

• the ‘slot coordination fee’ in the absence of congestion at Charleroi airport,

• the ‘terminal navigation charge’, which is not imposed on regional airports with a number of commercial flight movements below 50 000.

Furthermore, according to Belgium and contrary to BAC's assertion, a fee for the centralised infrastructure is charged by BSCA, as infrastructure manager, to the ground handling companies, including BSCA as handler. This fee is included in the contract between BSCA and Ryanair.

The fee imposed by the federal administration of EUR 0,18 per departing passenger is the responsibility of the Federal State and not BSCA.

The PRM fee is based on the actual costs incurred by BSCA. In this respect, according to Belgium, the size of the infrastructure at Charleroi airport simply needs to be compared with that at Brussels airport to realise that the management of this service provided to passengers with reduced mobility involves lower costs at Charleroi than at Brussels, if only in terms of the distance to be covered in order to reach the aircraft or leave the terminal.

In addition, Belgium confirms that it is correct that BSCA does not currently impose any security fee. This task falling within the public policy remit is the subject of compensation from Wallonia, but this compensation has been capped under the concession agreement between BSCA and Wallonia and any costs above this cap are payable by BSCA. However, BSCA is under no obligation to pass on these costs to passengers through a fee.

With regard to the aircraft parking fees, according to Belgium, the figure given in the table provided by BAC is incorrect as it indicates that there are no parking fees at Charleroi airport, which is wrong because the charges published on the BSCA website clearly indicate the existence of such fees set at EUR 1,98 per day (24 hours) and per tonne.

Several of the third parties having submitted comments, in particular Brussels Airlines and BAC, have remarked on the financing of the services of general interest provided by BSCA to Wallonia. They question whether some of the services provided by BSCA, namely safety, security, fire protection, and ground traffic and airport site safety services, can be regarded as activities excluded from the scope of Article 107(1) TFEU.

Airport development in the Walloon Region formed part of a comprehensive economic and social development strategy of the regions concerned, which was implemented in 1989. Wallonia has supplied various documents and studies confirming the pursuit of this objective.

In addition, as highlighted by the studies ordered by the Region and BSCA in 2000 and 2001, Brussels airport was at saturation point at that time and Charleroi airport was therefore in a position to contribute to the objective of tackling congestion.

Furthermore, it is clear from the various studies conducted at the request of the Region and BSCA that real demand existed for Charleroi airport in the low-cost segments. This demand has been confirmed in practice by its success, and it was therefore justified to develop Charleroi airport given the density of its catchment area, which is heavily populated and located at the centre of Europe.

The development of Charleroi airport has proven that this was not a case of financing unprofitable activities, as the airport became profitable in 2004. BSCA's business plan drawn up in 2001 forecast a return to profitability in 2005, i.e. a year later, which is testament to the prudent and reasonable nature of this plan.

According to Belgium, if the parallel development of passenger traffic at Brussels airport and Charleroi airport is examined, it can be concluded that any impact from Charleroi on Brussels has been marginal. The brake on development at Brussels airport was caused by the failure of Sabena in November 2001 and not by the concomitant development of Charleroi airport. As a reminder, a study carried out by BSCA in 2010 showed that 40 % of these passengers were flying for the first time, which proves that a significant part of the passenger volume has not been ‘stolen’ from Brussels airport. In addition, another significant part of the passenger volume consists of city trippers, who decide to take short-haul flights that they would not have taken in the absence of attractive fares. Until recently Brussels airport had seen little or no development in the low-cost segment. Accordingly, easyJet launched its first destinations from Brussels airport during 2007.

Any aid that may be identified by the Commission was certainly necessary to meet this objective of economic and regional development.

Funding the costs of the general interest tasks entrusted by the Region to BSCA was the most appropriate way of achieving the aforementioned objective of common interest. There were no other policy instruments or aid instruments that could have achieved this objective.

An incentive effect also exists because, in the absence of this funding, it would not have been possible to develop the airport's activities or achieve this volume level, which has resulted in improved mobility of European citizens and economic and regional development due to the airport's activities. Belgium refers the Commission to the number of passengers handled by BSCA over the period in question. As a reminder, during that period Charleroi airport was a category D airport with no possibility of distorting competition. The funding is also in line with the objectives of the aviation guidelines, namely ensuring the long-term profitability of regional airports.

Lastly, the aid amount is proportional. As a reminder, the compensation granted for the general interest tasks, as stipulated in Article 25 of the schedule of conditions annexed to the concession agreement between the Region and BSCA, is capped so that, if this cap is exceeded, which is the case with the part of the compensation for fire protection and ground traffic safety services, the costs must be covered by BSCA. Any aid granted in terms of the provision of services by SOWAER involves a marginal amount.

Given the limited amount of the aid in the context of this compensation for the services of general interest that may be called into question by the Commission and also the objective of these services, it must be considered that this proportionality condition is met.

As regards the absence or avoidance of negative effects on competition, the Commission must refer back to the time when the public financing was granted in order to assess this condition. It cannot be considered that, at that time, there was any undue impact on competition. As proven to the Commission, Charleroi airport has not been developed at the expense of other airports. Its activities stem from the creation of a new market in a specific segment that was not being developed at all or only to a very limited extent at Brussels airport.

For the record, two studies carried out by independent experts, Roland Berger International Management Consultant and GTM, revealed the imminent saturation of Brussels airport and the lack of any overlap in terms of customers between the two airports. At the time the airlines operating at Brussels airport had no interest in Charleroi airport, whilst Ryanair, the main user of Charleroi airport, had no plans to base itself at the main airports.

In addition, Charleroi airport was at a disadvantage due to the regulatory constraints on its opening hours. In 2000 the airport could open between 07:00 and 22:00. These hours were slightly altered to 06:30 and 23:00 in order to accommodate the aircraft based at the airport.

Furthermore, in 2000 Charleroi airport had a very poor image, as confirmed by the GTM and Roland Berger studies. The infrastructure was cramped, limited and little-used. The airport offered only one scheduled service and a number of charter flights in the summer. It cannot be considered that at the time Charleroi airport was in a position to compete with Brussels airport.

Lastly, Brussels airport was at an advantage in terms of infrastructure (several terminals, several runways, etc.) and accessibility due to its location close to the capital and the rail link that Charleroi airport lacked.

Belgium considers that it proved the existence of public service obligations when it ‘established’ that the first criterion of the Altmark judgment was met (see Section 5.1.1.1(c)(ii)). Moreover, according to Belgium, the parameters for calculating the compensation and the methods used to prevent any overcompensation were explained when Belgium proved that the third and fourth criteria of the Altmark judgment were met.

Belgium notes that Wallonia's intervention has been capped since 2006 with regard to the fire protection and ground traffic and airport site safety services and since 2010 with regard to the security, navigation office and marshalling services. The cost accounting system put in place by BSCA enables compliance with this criterion to be proven.

According to Belgium, accounting separation is guaranteed by the application of Article 25 of the schedule of conditions, which provides that the ‘concession-holder shall keep a separate operating account for the Services. This account may be subject at any time to on-the-spot checks by the concession authority’. This is also confirmed by the document in Annex 8.

Wallonia has the right to check, at any time, BSCA's accounts for the services of general interest, under Article 25 of the schedule of conditions. Accordingly, every year the Walloon administration conducts an on-the-spot check to examine the evidence underlying the declaration of claim submitted by BSCA in order to obtain the compensation for the services of general interest.

It follows from the above that the financing of the services of general interest that may be qualified as economic by the Commission can be declared compatible with the internal market based on the Decision of 28 November 2005.

As highlighted in recital 344 et seq., the construction of airport infrastructure cannot in principle be dissociated from the economic activity of operating the airport platform.

With regard to the construction of infrastructure at Charleroi airport, which was included in the multiannual investment programme, the Belgian authorities consider, however, that this investment programme was decided prior to 12 December 2000, which was the date of the ADP judgment. Belgium's arguments, set out in Section 5.1.1.1(a)(i), essentially aim to refute the scope and accuracy of the preliminary arguments given by the Commission in the 2012 extension decision, according to which the framework agreement of 20 July 2000 and the decision of the Walloon Government of 8 November 2000 (hereinafter the ‘2000 decisions’) do not impose any commitment on the Region with regard to a third party and are not irrevocable, firm and definitive in nature.

However, the Commission takes the view, for the reasons given below, that the decision to place the infrastructure at BSCA's disposal, including new infrastructure decided and constructed under the investment programme, and to provide certain services in return for a fee did not stem from the 2000 decisions, but from the 2002 agreement between SOWAER and BSCA.

• the beneficiary of the possible aid measure is BSCA,

• the public authorities having granted the aid measure are the Region and/or SOWAER. As indicated in recital 39 of this decision and acknowledged by Belgium137, SOWAER is the vehicle created by the Region and placed under its exclusive control to develop Wallonia's airport infrastructure and place this infrastructure at the disposal of the airport management companies in question. SOWAER, like the Region, is capable of granting State aid.

Prior to the 2002 SOWAER/BSCA agreement, BSCA did not benefit from any commitment on the part of the Region or SOWAER with regard to implementing the investment programme.

Belgium in fact recognises that no formal letter granting the aid was sent to BSCA. However, according to Belgium, although the Region was itself the beneficiary of the 2000 decisions, these created a commitment on the part of the Walloon Government. Belgium takes the view that the fact that this commitment was unilateral was not peculiar to this case. In its opinion, any financial measure, regardless of its beneficiaries, is always decided through a unilateral administrative act of the granting authority, which controls the application, amendment or withdrawal of said act.

The Commission notes that the 2000 decisions were not published or notified to BSCA. At any time before the 2002 SOWAER/BSCA agreement was signed, the Region could have altered the investment programme, by adopting a new unilateral decision or even totally abandoning this programme, without such a decision infringing BSCA's rights.

Furthermore, as indicated in the 2012 extension decision, this investment programme contained uncertainties about the financing mechanism and amounts. The latter could have been altered in line with changing needs. Accordingly, the new North terminal needed to be modular and its construction ‘had to be gradual and tailored to the development of the airport's actual activities and resulting operational needs’. In addition, the financing mechanism envisaged at the time — i.e. involving the Société Régionale Wallonne du Transport — was ultimately abandoned in favour of financing through SOWAER, a new instrument that received its financial resources only when it was created on 1 July 2001 and in the amount of EUR 75 000 000 only.

On the other hand, given that the investment programme was included in the 2002 SOWAER/BSCA agreement, SOWAER was under an obligation towards BSCA: it had to place the land and infrastructure at BSCA's disposal, including the infrastructure to be constructed in accordance with the investment programme, and to provide certain services, in return for a concession fee, otherwise it would fail to comply with its contractual obligations.

The Commission also takes the view that SOWAER's commitment to implement an investment programme and to provide certain services must be examined together with BSCA's commitment to pay a concession fee. It is impossible to determine whether the Region's plans to place the infrastructure at BSCA's disposal, including new infrastructure constructed in accordance with the investment programme, and to provide certain services constitute aid until the amount of the fee to be paid by BSCA in return is known.

The Commission concludes that the measure consisting in placing the infrastructure at BSCA's disposal, including new infrastructure which SOWAER undertook to construct, and in providing certain services in return for a fee was granted by the 2002 SOWAER/BSCA agreement. It therefore postdates the ADP judgment.

The Commission takes the view that investments and major repairs involving assets associated with air navigation (relating to the control tower, for example), aircraft firefighting, security (defined as combating acts of unlawful interference), police and customs may be non-economic in nature. Given that, in the present case, air navigation, aircraft firefighting, security, police and customs services are not organised according to a market logic, the Commission considers that the investments and major repairs involving assets associated with these services are not economic in nature. In particular, the fencing of the part of the airport site that is accessed through police checkpoints and the part of the site where the aircraft are located may be regarded as a non-economic activity insofar as it concerns security.

The Commission also considers as non-economic those costs associated with investments in and maintenance of buildings and equipment used for both economic activities and non-economic activities, in a proportion corresponding to their use for a non-economic activity. In particular, 7 % of the cost of investments made in the new terminal may be regarded as non-economic in nature, because 7 % of the terminal surface area is occupied by police and customs services, passenger and baggage search officials, and officials from the Walloon Public Service responsible for site safety.

The Commission also takes the view that investments in fire detection in passenger car parks are economic in nature. These costs are not associated with a public policy remit, but are inherent in the commercial operation of the passenger car park.

SOWAER is directly responsible for the investments and major repairs. These costs are not therefore financed through aid paid to BSCA, which the latter could use for economic activities.

Lastly, as highlighted by point 37 of the aviation guidelines, the Commission must check that the funding of non-economic activities does not lead to undue discrimination between airports. Otherwise their funding cannot escape the State aid rules.

As clarified by Belgium, SOWAER carries out the investments and major repairs without discriminating between the airports for which it is responsible, namely the airports in the Walloon region.

As highlighted by recital 26 of this decision, the Belgian regions have been given the necessary powers to equip and operate public airports situated within their territory, except for Brussels National Airport. Given this legal framework, the Commission takes the view that the relevant level for assessing the existence of discrimination in terms of the financing of the investments and services provided by SOWAER is the region, and not the Federal State. As SOWAER carries out the investments and major repairs without discriminating between the two main Walloon airports (Liège and Charleroi), the Commission concludes that there is no undue discrimination between the airports.

The financing of the non-economic activities described in recital 365 cannot therefore be qualified as State aid and is consequently excluded from the subsequent analysis.

• the ‘maintenance services’, as defined by Articles 12 and 19 of the schedule of conditions annexed to the Region/BSCA agreement;

• the ‘ground traffic safety services’, as defined by Article 25 of the schedule of conditions amended by Amendment No 5 of 10 March 2006.

As indicated in recitals 73 and 74, Amendment No 5 of 10 March 2006 amended Article 3.2.2 of the Region/BSCA agreement and Article 25 of the schedule of conditions. As a result of these amendments, the Region pays compensation to BSCA for the costs of the fire protection and ground traffic and airport site safety services. Article 25 of the schedule of conditions, as amended, provides that ‘the ground traffic and airport site safety services include routine maintenance of the airport site, technical maintenance services for buildings, runways, surrounding areas and vehicle fleet, minor surfacing work, routine maintenance and repair of the runway and accesses, operational maintenance and servicing of the general lighting and runway lighting, mowing services, rubber removal from the runway and its markings, snow clearance and any other services ensuring the safety of ground traffic, airport site and infrastructures, except for commercial areas of the airport zone’.

The Commission points out that the definition of ‘ground traffic and airport site safety services’, for which BSCA receives compensation from 10 March 2006, substantially overlaps with the definition of ‘maintenance services’, for which BSCA received compensation before 10 March 2006. In order to determine whether these services constitute economic services, it will examine these together.

The Commission takes the view that these services, whether they involve routine maintenance of the airport site, maintenance of buildings, runways, surrounding areas and vehicle fleet, minor surfacing work, routine maintenance and repair of the runway and accesses, operational maintenance and servicing of the general lighting and runway lighting, mowing services, rubber removal from the runway and its markings, snow clearance or any other services ensuring the safety of ground traffic, airport site and infrastructures, do not fall within the public policy remit. These services differ in particular from the security services. They are inherent in the commercial operation of the airport, which involves ensuring that the airport site, including its runways, is sufficiently well-maintained to enable the landing and take-off of aircraft under satisfactory safety conditions. No public policy remit is associated with this type of service.

The Commission disputes that it can be concluded from recitals 182 and 183 of the decision on Leipzig/Halle airport that the Commission has in the past taken the view that tasks comparable to maintenance and traffic safety, as defined in the Region/BSCA agreement, fall within the public policy remit, for the following reasons.

Firstly, the maintenance and traffic safety costs defined in the Region/BSCA agreement are much broader than the operational safety investment costs referred to in the decision on Leipzig/Halle airport. The latter consist of the uninterruptible power supply for the aprons, transformer station, high voltage cables and runway lighting. The maintenance and traffic safety costs defined in the Region/BSCA agreement ‘include routine maintenance of the airport site, technical maintenance services for buildings, runways, surrounding areas and vehicle fleet, minor surfacing work, routine maintenance and repair of the runway and accesses, operational maintenance and servicing of the general lighting and runway lighting, mowing services, rubber removal from the runway and its markings, snow clearance and any other services ensuring the safety of ground traffic, airport site and infrastructures, except for commercial areas of the airport zone’.

Secondly, the Commission points out that, contrary to Belgium's argument, the Commission did not conclude that the operational safety tasks referred to in the Leipzig/Halle decision constitute tasks falling within the public policy remit. Recital 182 of that decision states that ‘the Commission can conclude that in the present case certain costs fall within the public policy remit’ (emphasis added). In recital 183 of the same decision, the Commission considers that ‘to the extent that they fall within the public policy remit’, the measures may not amount to State aid (emphasis added). It indicates that ‘in the present case independently [of] whether the Commission was to accept the approach advanced by the German authorities that none of the costs should be considered as State aid, the final assessment of the measure would not change’ (emphasis added). As a result, in those recitals the Commission neither confirmed nor contradicted Germany's position that certain tasks, including operational safety tasks, fell within the public policy remit, but instead indicated that it did not need to take a position, given that, assuming that the measure did constitute aid, this would be authorised.

Thirdly, the Commission points out that, in the General Court's judgment on the Commission decision on Leipzig/Halle airport, contrary to Belgium's argument, the Court did not confirm this alleged Commission position in paragraph 225 of its judgment. The Court in fact reproduced recitals 182 and 183 of the Commission decision in order to recall the latter's position and concluded that the Commission had considered that it did not have to reach a definitive conclusion on this question (namely if it were to accept the German authorities' argument that none of the costs should be considered as State aid).

The Commission therefore concludes that the ‘maintenance services’, as defined by Articles 12 and 19 of the schedule of conditions annexed to the Region/BSCA agreement, and the ‘ground traffic safety services’, as defined by Article 25 of the schedule of conditions amended by Amendment No 5 of 10 March 2006, constitute economic services. Their funding does not therefore escape the applicable State aid rules.

• flight tracking and recording152 and flight planning153,
• marshalling154.

According to Belgium (see recital 240), flight tracking and recording, provisional flight planning and marshalling services are essential parts of civil aviation safety and therefore fall within the public policy remit, given that they are fundamental components in the safety of an airport.

The Commission takes the view that the services covered by this compensation are activities inseparable from the economic activity of the airport operator BSCA. These services cannot be included within the security services intended to combat acts of unlawful interference or within any activity falling within the public policy remit.

The Commission therefore concludes that flight tracking and recording, flight planning and marshalling constitute economic services. Their funding does not therefore escape the applicable State aid rules.

On 3 December 2002 SOWAER contributed the sum of EUR 3 808 660 to purchase 6 143 shares in BSCA, representing 49,23 % of BSCA's capital, i.e. a price of EUR 620 per share.

According to the Commission's calculations based on the BSCA 2001 business plan, the net present value of BSCA, after the capital injection, was EUR 65,6 million. Given the total number of shares following the capital injection, this net present value corresponds to a price per share of EUR 5 287, which is significantly higher than the price paid of EUR 620 per share.

These points therefore suggest that the capital increase subscribed by SOWAER in December 2002 passes the market economy operator test. However, the Commission does not consider itself in a position to rule out the possibility that this capital increase conferred an economic advantage on BSCA. The Commission points out that this capital increase was carried out shortly after the 2002 agreements were concluded and that, in addition, BSCA's losses, which necessitated the capital injection, were linked to the basic structure of the system defined by the 2002 agreements. Those agreements therefore conferred an advantage on BSCA. As a result, the Commission cannot rule out that the 2002 capital injection may also have conferred an economic advantage on BSCA. If such an advantage exists, it was conferred only on BSCA and is therefore selective.

In a decision of 23 May 2001, the Walloon Government approved SOWAER's financial plan. This financial plan includes an investment programme for Charleroi airport. It was this programme that was annexed to the 2002 SOWAER/BSCA agreement.

The amount of the fee remaining to be paid by BSCA for the provision of the infrastructure and certain services depends on the subsidy paid by the Region to BSCA to cover the fixed fee.

In a decision of 3 April 2003, the Walloon Government officially noted the 2003 investment programme.

The Commission concludes from the above that the 2002 agreements, the 2002 capital increase and the 2003 investment decision constitute measures imputable to the State.

The Commission has strong doubts that, at the present time, an appropriate benchmark can be identified to establish a true ‘market price’ for services provided by airport managers.

Moreover, the liberalisation of the air transport market complicates any comparative analysis. As the present case amply demonstrates, commercial arrangements between airports and airlines are not necessarily based on a list of public prices for individual services. These commercial relationships vary widely. They include the sharing of risks in terms of traffic and of correlative commercial and financial responsibilities, the generalised use of incentive mechanisms (for example, in the form of discounts connected with the number of links or passengers carried), and variations in the distribution of risk over the term of contracts. As a result, it is difficult to compare transactions based on a price per rotation or per passenger.

Ryanair argues that the market economy operator principle can be applied based on a comparison with the commercial arrangements of other European airports. Ryanair cites a study by Oxera from 2 October 2011, which proposes Glasgow Prestwick and Liverpool John Lennon airports as comparators.

However, the Commission has strong doubts that these two benchmarks are relevant for assessing the situation of Charleroi airport, given that the revenue structure of Glasgow Prestwick airport is heavily based on cargo, which does not exist at Charleroi. Moreover, both airports have apparently received public funding in recent years.

In addition, as indicated above, the transactions to be analysed consist of several ‘prices’, i.e. in particular the various airport charges, the price of ground handling services and, for certain measures, the contributions to Promocy for marketing activities. Each of these transactions therefore leads to a complex set of cash flows between the airport manager and the airline and its subsidiaries.

Accordingly, a comparison between just the airport charges invoiced by BSCA to Ryanair and the airport charges invoiced at the comparison airports would not provide any useful indication as to compliance with the market economy operator principle. At the very least, in order to validly compare the transactions covered by this assessment, it would be necessary to identify, for the airports in the comparison sample, a set of comparable transactions, which must particularly include equivalent marketing services and equivalent ground handling services. Identifying such a sample of comparable transactions would prove impossible, given that the transactions covered by this assessment are so complex and specific, and all the more so as the prices of ground handling services and marketing services are rarely made public and would be difficult to obtain in order to form a basis for comparison.

Lastly, assuming that it could be established, based on a valid comparative analysis, that the ‘prices’ applied in the various transactions covered by this assessment were equivalent to or higher than the ‘market prices’ established using the sample of comparison transactions, the Commission could not, however, conclude that those transactions corresponded to the market price if it proved that, on their conclusion, the airport manager may have expected them to lead to incremental costs higher than the incremental revenues. A market economy operator would not in fact be interested in offering goods or services at the ‘market price’ if this led to an incremental loss.

The Commission considers it appropriate to reiterate in the context of this analysis that, following the adoption of the aviation guidelines, both Belgium and the interested parties were invited to submit comments on the application of those guidelines to the present case. In the event, neither Belgium nor the interested parties, except for Ryanair, disputed in substance the Commission's approach according to which, where an appropriate benchmark cannot be identified to establish a true market price for the services provided by airports to airlines, the most relevant criterion for assessing the arrangements concluded between these two parties is an ex ante incremental profitability analysis.

The Commission stresses that the criterion indicated in point 63 of the aviation guidelines reflects the logic of the market economy operator test, but that this criterion, which refers to the arrangements concluded between specific airports and airlines rather than to a general business plan as is usually the case when applying the market economy operator test, has only recently been introduced. Consequently, the Commission admits that it may be difficult for Member States and the operators concerned to provide documents dating from the moment when the measure was granted and precisely meeting the requirements in point 63 of the aviation guidelines, where these arrangements were concluded some years previously. The Commission will take these considerations into account when applying the market economy operator test to the agreements with Ryanair.

According to point 64 of the aviation guidelines, ‘In order to assess whether an arrangement concluded by an airport with an airline satisfies the MEO test, expected non-aeronautical revenues stemming from the airline's activity should be taken into consideration together with airport charges, net of any rebates, marketing support or incentive schemes. Similarly, all expected costs incrementally incurred by the airport in relation to the airline's activity at the airport should be taken into account … In contrast, costs which the airport would have to incur anyway independently from the arrangement with the airline should not be taken into account in the MEO test’ (the footnotes have not been reproduced).

The Commission has therefore applied the market economy operator test to the following measures, in line with the principles set out above: