The European Commission has ruled that three German measures supporting Ryanair and Frankfurt-Hahn airport violate EU State aid rules. Germany must now recover the illegal aid, including interest.
Also, in a separate decision, the Commission also determined that other public funding for Frankfurt-Hahn airport, Haitec AG, and Ryanair does not constitute State aid.
Margrethe Vestager, Executive Vice-President for competition policy, highlighted the importance of upholding fair competition. “Fair competition among airports and airlines is essential for consumers, economic growth, and jobs.”
“Our investigation confirmed that several public funding measures for Frankfurt-Hahn airport and Ryanair violate EU State aid rules. These measures gave Ryanair an unfair advantage over competitors and harmed other regional airports. Germany must now recover the aid.”
Ryanair Responds…
Moreover, in a statement, Ryanair has said the following on this:
“We welcome the Commission’s findings that all investigated contracts between Ryanair and Frankfurt Hahn concluded between 2013 and 2016 were concluded at market rates in line with EU State aid rules.”
“We will appeal to the EU General Court the Commission’s claim that certain legacy contracts for marketing services involving Ryanair constituted State aid.
“Ms Vestager’s decision to investigate historical – almost 20 years old – alleged State aid at a small regional airport in Germany is surprising in the context of her abject failure to recover the enormous €6bn C19 State aid package received by Lufthansa, which was declared illegal by the EU General Court in May 2023.”
“Having waved through a total of €11bn of C19 State aid supports for the Lufthansa Group, which has damaged competition in Germany, and resulted in the German air transport market being the slowest to recover from the C19 pandemic, the outgoing commissioner for competition is now belatedly trying to show that her department has teeth.”
“Ryanair once again now calls on Ms Vestager to order Germany to immediately recover this multi-billion-euro illegal State aid package from Lufthansa and impose adequate remedies to repair at least some of the damage to competition done by this massive State bailout.”
The Commission’s Investigation
In October 2018, the Commission launched an in-depth investigation into German public funding for Frankfurt-Hahn airport and Ryanair.
Furthermore, this investigation was part of the Commission’s ongoing efforts to ensure fair competition in the aviation sector across the European Union.
Moreover, the probe aimed to determine whether the public funding measures complied with EU State aid rules.
This is designed to prevent member states from giving unfair advantages to specific companies or industries.
State aid, as defined by EU law, occurs when a government provides financial support that gives certain companies an unfair advantage.
Also, the investigation examined:
2 measures favoring Frankfurt-Hahn airport:
- A land sale guarantee from Rhineland-Palatinate
- The return of a land plot to the airport without compensation
4 measures benefiting Ryanair:
- Two marketing agreements with Rhineland-Palatinate (2005 and 2017)
- Three airport service agreements with Frankfurt-Hahn (2013, 2015, and 2016)
- Training support
- Lease of a crew/pilot school and maintenance hall
3 Measures Incompatible with State Aid Rules
The Commission found three measures incompatible with EU State aid rules.
Also, these included the return of a land plot to Frankfurt-Hahn airport without compensation, two marketing agreements between Rhineland-Palatinate and Ryanair, and training support provided to Ryanair.
Furthermore, these measures involved State aid, as they were not aligned with market conditions or concerned economic activities that didn’t meet Germany’s compatibility claims.
Also, the decision highlights the Commission’s commitment to maintaining a level playing field in the aviation industry, ensuring that public funds are not used to give certain companies an unfair competitive edge.
Moreover, Germany must now recover about €13-14 million plus interest from Ryanair and €1.25 million plus interest from Frankfurt-Hahn airport. EU rules require prompt recovery of incompatible State aid to restore fair competition. There are no fines, but beneficiaries must forfeit their unfair advantages.
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