Airport News

Airport News

The European Commission is seeking to cut state aid to airports that serve more than 5 million passengers a year in an effort to encourage competition.

The regulator, which also plans to cut subsidies to low-cost airlines adding flights or routes, said the draft rules would ensure a level playing field for the industry, which accounts for more than EUR€140 billion (USD$182.1 billion) of the EU's economic output.

The European Union's more than 460 airports service 150 airlines and provide work for 2.3 million people. Critics say the airline industry receives an average EUR€3 billion in subsidies each year.

The draft proposal will preserve "fair competition regardless of the business model – from flag carriers to low-cost airlines and from regional airports to major hubs," EU Competition Commissioner Joaquin Almunia said in a statement.

Under the draft rules airports with more than 5 million passengers a year will not be allowed to receive public investment aid while smaller facilities will have to present a business plan in return for EU approval for their state aid.

Only airlines flying from airports with fewer than 3 million passengers will be granted start-up aid for launching a new route or a new schedule, according to the draft proposal, which may hit budget airlines such as Ryanair.

The world's most popular low-cost carrier and rivals, such as Wizz Air, have come under regulatory fire for receiving state aid in several EU countries.

Green campaigning group Transport & Environment (T&E) said the EU proposal did not go far enough.

"Some low-cost carriers have disproportionately and unjustifiably benefited from these subsidies, while the promises of thousands of tourists, visitors, second homebuyers and wider benefits to the local economy have often not materialised," said T&E policy official Aoife O'Leary.

"We urgently need robust provisions to stop these on-going abuses so we can put scarce taxpayer money to better use," she said.

The EU executive said third parties have until September 25 to comment on its draft rules, which are set to come into force next year.