Arad airport is open to domestic and international passenger and freight traffic and operated a 1 800 × 45 m runway. The capacity of the airport amounts to 200 passengers/hour. The airport is endowed with good quality technical equipment. According to Romania, at the time of the submission of information, the local authorities approved financing for the extension and the modernisation of Arad airport given, inter alia, the local authorities strategic objective to convert the airport into an intermodal passenger and freight hub for the development of the region.

During the period 2007-2009, the airport was focused on low cost traffic. Blueair operated several European destinations (Verona, Valencia, Stuttgart, Barcelona, Treviso) and Ryanair served one destination (Milano) for the period April-June 2008.

The Romanian authorities have submitted to the Commission an analysis — prepared by the airport in 2008 — of the activity of that time and the passenger traffic for the period 2009-2020.

• growth in non-aeronautical revenues from RON 0,7 million in 2007 to RON 1,3 million in 2008,

• growth in aeronautical revenues from RON 1,7 million in 2007 to RON 2,3 million in 2008,

• growth in handling revenues from RON 0,2 million in 2007 to RON 1 million in 2008,

• an increase in the public financing to the airport from RON 2,4 million in 2007 to RON 3,4 million in 2008.

According to the analysis, the airport largely relied on low cost traffic as major growth driver: in 2008 88 % of overall passenger traffic was represented by scheduled flights operated by Blue Air and 11 % by Ryanair traffic. The analysis assumed a diversification of airline connections by attracting a new low-cost airline, EasyJet.

The forecasts presented in the analysis foresaw Arad airport to increase its traffic from 128 834 passengers in 2008 to 1 064 116 passengers in 2020 in an optimistic scenario.

Regarding Timișoara airport, its passenger traffic increased from 859 329 passengers in 2007, 886 083 passengers in 2008 and 991 758 passengers in 2009. From 2007 to 2009, the airport was a regional hub for Carpatair, a regional full service carrier which operated some 32 domestic and European destinations. Other airlines such as Tarom, Lufthansa, Austrian Airlines, Malev, Alitalia, Moldavian Airlines, Alpi Eagles, Skyeurope Airlines, Wizzair served the airport.

The characteristics of the runway at Baia Mare airport allow the operation on a regular basis of aircraft with a maximum capacity of 75 passengers for short-haul flights.

The characteristics of the runway at Satu Mare airport allow the operation of aircrafts with a seating capacity of up to 180 passengers for medium-haul flights. The capacity of the airport amounts to 100 passengers/hour.

Debrecen Airport (Hungary) is at 80 km from Oradea airport, but the travelling time is of at least 1h30 since the trip includes passing of a border passport control from Romania which is not in the Schengen area to Hungary which belongs to the Schengen area. Debrecen airport had 42 900 passengers in 2007, 42 650 passengers in 2008 and 25 060 passengers in 2009. The two airports had different business models in 2007-2009 since Debrecen airport was focused on charter flights (with low cost traffic developing only in the last years), while Oradea airport was focused on domestic flights by regional and national full service carriers.

In Leipzig/Halle Airport, the General Court held that from the date of the judgment in Aéroports de Paris (12 December 2000), the application of State aid rules to the financing of airport infrastructure could no longer be excluded.

The Commission therefore finds that at least as of from 12 December 2000, the airport manager has been engaged in an economic activity and that it constitutes an undertaking in the sense of Article 107(1) of the Treaty (see also point 29 of the 2014 Aviation Guidelines).

The Court of Justice has held that activities that normally fall under the State's responsibility in the exercise of its official powers as a public authority are not of an economic nature and do not fall within the scope of the rules on State aid.

At no time did Romania claim that the financing granted to any of the regional airports subject to this Decision covered costs which would qualify as public policy remit costs. Nor have any of the airport operators, apart from Cluj-Napoca Airport, claimed in the course of the investigation that it would be the case. As a matter of fact, the compensation mechanism is designed to cover the difference between the revenues and losses of the airports, without making a distinction between public policy remit costs and other types of costs. This question can be left open as regards Cluj-Napoca Airport and Târgu Mureș Airport, since this Decision does not close the pending investigation with respect to those airports. As to the other airports, the Commission concludes that the measures do not constitute compensation for public policy remit costs.

In this case the financing is granted directly by the State or the local authorities through their own resources. Therefore, the Commission confirms that all measures under assessment are granted through State resources and are imputable to the State.

The public funding granted to the airport managers aimed at offsetting the losses incurred when carrying out their ordinary activity. Nothing in the factual evidence available to the Commission or in the comments received from Romania or third parties suggest that the granting authorities could expect any financial return as a result of those funding measures when they decided to grant them. Therefore, the measures at issue do not comply with the market economy operator principle.

In the course of the investigation Romania claimed that the disputed public financing would represent compensation for the provision of SGEIs.

1. (a)

   the recipient undertaking must actually have public service obligations to discharge and these obligations must be clearly defined (hereinafter ‘Altmark 1’);

2. (b)

   the parameters on the basis of which the compensation is calculated must be established in advance in an objective and transparent manner (hereinafter ‘Altmark 2’);

3. (c)

   the compensation cannot exceed what is necessary to cover all or part of the costs incurred in the discharge of public service obligations, taking into account the relevant receipts and a reasonable profit for discharging those obligations (hereinafter ‘Altmark 3’);

4. (d)

   where the undertaking which is to discharge public service obligations, in a specific case, is not chosen pursuant to a public procurement procedure which would allow for the selection of the tenderer capable of providing those services at the least cost to the community, the level of compensation needed must be determined on the basis of an analysis of the costs which a typical undertaking, well run and adequately provided with means of transport so as to be able to meet the necessary public service requirements, would have incurred in discharging those obligations, taking into account the relevant revenues and a reasonable profit for discharging the obligations (hereinafter ‘Altmark 4’).

Those four conditions must be fulfilled cumulatively. Therefore, if one of them is not satisfied, it cannot be claimed that the measures at issue do not involve an economic advantage on the basis of the Altmark judgement.

Competition between airports can be assessed in the light of airlines' criteria of choice, and in particular by comparing factors such as the type of airport services provided and the clients concerned, population or economic activity, congestion, whether there is access by land, and the level of charges and overall commercial conditions for use of airport infrastructure and services (see point 43 of the 2014 Aviation Guidelines).

Moreover, airport operators are in competition for the management of airport infrastructure, including at local and regional airports. The public funding of an airport may therefore distort competition in the markets for airport infrastructure operation. Moreover, public funding to airports can distort competition and have an effect on trade in air transport markets across the Union. Finally, intermodal competition may also be affected by public funding to airports (see point 44 of the 2014 Aviation Guidelines).

Therefore, the measures under assessment distorted competition or at least threatened to distort competition and affected trade between Member States.

On the basis of the above, the Commission concludes that the measures under assessment constitute State aid to those airports within the meaning of Article 107(1) of the Treaty.

Article 106(2) of the Treaty sets out that ‘undertakings entrusted with the operation of an SGEI or having the character of a revenue-producing monopoly shall be subject to the rules contained in this Treaty, in particular to the rules on competition, in so far as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them. The development of trade must not be affected to such an extent as would be contrary to EU interest.’

That Article provides for a derogation from the prohibition of State aid contained in Article 107 of the Treaty to the extent that the aid is necessary and proportional to ensure the performance of the SGEI under acceptable economic conditions. Under Article 106(3) of the Treaty it is for the Commission to ensure application of this Article, including, inter alia, by specifying under which conditions it considers the criteria of necessity and proportionality to be fulfilled.

According to paragraph 69 of the 2011 SGEI Framework, ‘the Commission will apply the principles set out in this Communication to unlawful aid on which it takes a decision after 31 January 2012 even if the aid was granted before this date’.

Paragraph 16 of the 2011 SGEI Framework sets out the requirements for an SGEI to be considered validly entrusted. Notably paragraph 16(a) thereafter lays down that the entrustment act must spell out the content and duration of PSOs. Therefore, for the same reasons already mentioned in Sections 7.1.4.1 and 7.3 above, in this case the aid cannot be considered compatible under the 2011 SGEI Framework.

The Commission therefore considers that the aid measure in question cannot be declared compatible with the internal market pursuant to Article 106(2) of the Treaty.

1. (a)
   Contribution to a well-defined objective of common interest: this condition is fulfilled, inter alia, if the aid increases the mobility of Union citizens and connectivity of the regions or facilitates regional development37;
2. (b)
   Appropriateness of State aid as a policy instrument: the Member States must demonstrate that the aid is appropriate to achieve the intended objective or resolve the problems intended to be addressed by the aid38;
3. (c)
   Need for State intervention: the aid should be targeted towards situations where such aid can bring about a material improvement that the market itself cannot deliver39;
4. (d)
   Existence of incentive effect: this condition is fulfilled if it is likely that, in the absence of operating aid, and taking into account the possible presence of investment aid and the level of traffic, the level of economic activity of the airport concerned would be significantly reduced40;
5. (e)
   Proportionality of the aid amount (aid limited to the minimum necessary): in order to be proportionate, operating aid to airports must be limited to the minimum necessary for the aided activity to take place41;
6. (f)
   Avoidance of undue negative effects on competition and trade 42.

On the basis of the above assessment, the Commission concludes that the aid granted in 2007-2009 to Romanian airports at Arad, Bacău, Baia Mare, Craiova, Iași, Oradea, Satu-Mare, Sibiu, Suceava, Tulcea and Constanța in the period 2007-2009 is compatible with the internal market pursuant to Article 107(3)(c) of the Treaty.