COMMISSION DECISION (EU) 2023/105

of 26 July 2022

on the measures SA.33960 2012/C (ex 2012/NN) implemented by the French Republic in favour of the successive managers of Beauvais-Tillé airport and the airlines operating there

(notified under document C(2022) 5076)

(Only the French text is authentic)

(Text with EEA relevance)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union, and in particular the first subparagraph of Article 108(2) thereof,

Having regard to the Agreement on the European Economic Area, and in particular Article 62(1)(a) thereof,

Having called on interested parties to submit their comments pursuant to those articles (1), and having regard to their comments,

Whereas:

1. PROCEDURE

(1) By letter dated 27 November 2009, the Commission received a complaint about advantages which the airline Ryanair was allegedly enjoying at a number of local and regional French airports. In respect of Beauvais-Tillé airport (‘Beauvais airport’), the complaint also mentioned financial support allegedly received by the successive managers of the airport, namely the Chambre de commerce et d'industrie d’Oise (Oise Chamber of Commerce and Industry, ‘Oise CCI’) and the Société Aéroportuaire de Gestion et d'Exploitation de Beauvais (Beauvais airport managing and operating company ‘SAGEB’). The complaint drew in particular on a report by the Chambre régionale des comptes de Picardie (Picardie regional court of auditors, ‘CRC’) dated 3 September 2007 (2).

(2) By letter dated 16 March 2010, the Commission sent the French authorities a non-confidential version of the complaint and asked them for explanations concerning the alleged measures (‘the measures’). The French authorities initially responded by letters dated 31 May and 7 June 2010, and provided additional information by letter of 2 November 2011. The Commission forwarded these comments to the complainant and asked France for additional information by letter dated 5 December 2011. The French authorities sent their comments and their replies by letter dated 31 January 2012.

(3) By letter dated 30 May 2012, the Commission notified France of its decision (‘the opening decision’) to initiate the formal investigation procedure laid down in Article 108(2) of the Treaty on the Functioning of the European Union (TFEU) in respect of, first, the aid potentially disbursed in succession to Oise CCI and SAGEB between 2000 and 2008 and, second, the aid potentially paid by Oise CCI and SAGEB to various airlines between 1 January 1997 and 30 May 2012.

(4) The opening decision was published in the Official Journal of the European Union (3). The Commission invited interested parties to submit their comments on the measures in question.

(5) By letter of 14 August 2012, the Commission received comments from France. On 25 October 2012, it then received comments submitted jointly by the Beauvais airport joint authority (Syndicat mixte de l'aéroport de Beauvais, ‘SMABT’), Oise CCI and SAGEB. The airlines Ryanair and Wizz Air sent their comments to the Commission on 26 October 2012. By letter of 21 December 2012, France stated that it did not wish to submit any response to these comments.

(6) In addition, by letters of 10 April 2013, 20 December 2013, 9 and 31 January 2014, 7 February 2014, 28 March 2014, 27 January 2015, 7 December 2015 and 1 April 2019, Ryanair submitted a set of general comments, all relating to several State aid cases initiated by the Commission and involving Ryanair. It also submitted economic analysis reports by the consultancy firm Oxera on 12 and 26 September 2014 and 6 November 2014.

(7) Wizz Air also submitted comments on 21 March 2014, and likewise submitted economic analysis reports by Oxera on Beauvais airport on 4 November 2014.

(8) The Commission forwarded the comments by interested parties to France and gave it the opportunity to respond (4). France answered by letters dated 13 July 2012, 21 December 2012, 7 June 2013, 29 January 2014, 23 May 2014, 18 December 2015 and 24 June 2019. It its letter of 13 July 2012, France informed the Commission that it had no observations to make in respect of the comments submitted, notwithstanding the remarks it had already sent in connection with the Marseille Provence airport case (5). In addition, by letters of 25 July 2012, 29 January 2014, 23 May 2014 and 18 December 2015, France informed the Commission that it did not wish to submit any observations on the comments by third parties.

(9) By letter of 24 February 2014, the Commission informed France and the interested parties that had already submitted comments of its intention to assess the compatibility of the measures with the internal market under the Guidelines on State aid to airports and airlines (‘the 2014 Guidelines’) (6). The Commission invited the recipients of these letters to comment in this connection, if they so wished. In addition, on 15 April 2014 a notice was published in the Official Journal of the European Union (7) inviting France and interested third parties to submit their comments in this connection.

(10) France submitted its comments on the 2014 Guidelines on 19 March 2014. SMABT, SAGEB and Oise CCI sent joint comments to the Commission on 14 March 2014. Wizz Air submitted its comments on 21 March 2014, Air France on 25 April 2014 and the NGO Transport & Environnement by letter of 13 May 2014. The various comments submitted were forwarded to France by letter of 28 May 2014. France chose not to submit any response.

(11) By letters dated 16 April 2014 and 16 July 2014, the Commission asked France for additional information. France replied on 19 June 2014 and 18 August 2014 respectively.

2. BACKGROUND TO THE AID

2.1. Characteristics of Beauvais airport

(12) Beauvais airport is a French civilian airport located in the municipality of Tillé in the Department of Oise, 3 km north of Beauvais and around 90 km from Paris. The airport is open to domestic and international commercial traffic. Beauvais airport is 68 km from Amiens-Glisy airport, 80 km from Roissy-Charles de Gaulle, about 90 km from Rouen airport and 106 km from Orly South.

(13) As of 1 May 1997, Ryanair started operating several routes from Beauvais airport to European destinations. From 2002, a number of airlines (Goodjet, Volare, Air Horizons, Sterling, etc.) gradually started offering scheduled services out of Beauvais airport. Despite the increase in traffic and the arrival of new airlines, Ryanair remained the biggest airline at the airport: its traffic accounted for over 80 % on average of all business at the airport in terms of passenger numbers between 1997 and 2011. Low-cost traffic accounted for almost all the airport’s business in 2011.

(14) Passenger traffic at the airport between 1997 and 2011 is summarised in Table 1. Table 1 Passenger traffic at Beauvais airport (passengers) 1997-2011 (8) Passengers Ryanair share Blue Air share Wizz Air share 1997 207 000 127 453 (62 %) 1998 260 000 194 211 (75 %) 1999 387 000 315 771 (81,5 %) 2000 387 229 346 551 (89 %) 2001 422 972 371 376 (87 %) 2002 677 857 459 572 (68 %) 2003 969 445 806 383 (83 %) 2004 1 427 595 1 292 368 (91 %) 40 919 2005 1 848 484 1 528 405 (83 %) 4 023 162 465 2006 1 887 971 1 626 279 (86 %) 28 947 148 861 2007 2 155 633 1 907 662 (88,5 %) 69 795 138 256 2008 2 484 635 2 212 165 (89 %) 81 072 178 340 2009 2 591 864 2 210 078 (85 %) 79 414 300 088 2010 2 931 796 2 465 476 (84 %) 84 660 377 812 2011 3 677 794 3 185 327 (87 %) 90 083 401 370

2.2. Operators of Beauvais airport

2.2.1. Management of the airport by Oise CCI (1960 - 31.5.2008)

(15) Until 31 December 1992, Oise CCI managed Beauvais airport on the basis of a 30-year public equipment concession (concession d’outillage public) signed in 1960 with the State, which owned the airport at the time. Oise CCI then managed the airport under a temporary authorisation to occupy the public domain (autorisation temporaire d’occupation du domaine public, ‘AOT’) granted by prefectoral order of 1 October 1997. This provided the legal basis for the management of the airport from 1 January 1993 to 31 December 1999. It was renewed several times up to 3 May 2002.

(16) By concession agreement concluded on 30 January 2002, which entered into force on 4 May 2002, the State granted the concession for the construction, maintenance and operation of Beauvais airport to Oise CCI for a duration of 5 years.

(17) By agreement of 1 March 2007, the State transferred the ownership and the powers to develop, maintain and manage Beauvais airport to SMABT, with effect from 1 March 2008.

(18) SMABT, set up by prefectoral order of 20 October 2006, brings together the Region of Picardie (38 % of SMABT’s funding), the Department of Oise (38 %) and the Beauvaisis intermunicipal authority (communauté de communes du Beauvaisis, ‘CCB’, 24 %). SMABT operates by pooling the services previously provided separately by its members and to this end a service provision agreement was concluded with the Department of Oise so that members of its staff could be seconded to SMABT. SMABT is subject to State oversight of its budget (9) and of the legality of its decisions in accordance with the Local Government Code (Code général des collectivités territoriales, CGCT) in force when it was set up, and specifically Articles L. 1612-1 to L. 1612-20 and L. 3132-1 to L. 3132-4 thereof.

(19) By decision of 7 June 2007, SMABT agreed in principle to delegate the public service of operating Beauvais airport and the bus service between Beauvais airport and Paris, and authorised the Chair of SMABT to launch a call for tenders. The following tasks were to be entrusted to the successful tenderer: — upkeep, maintain and operate Beauvais airport; — carry out certain works under a multi-annual investment plan, including in particular investments in maintaining installations and building commercial infrastructure (specifically building a second terminal); — operate bus services connecting the airport to Paris and other locations in the Île-de-France region.

(20) Pending the conclusion of the award procedure referred to in recital 19, the concession agreement of 30 January 2002 with Oise CCI was renewed by the State until 1 March 2008 (10). By amendment to the agreement of 29 February 2008, SMABT, on behalf of the State, extended it again to 31 May 2008.

(21) The operation of Beauvais airport by Oise CCI was booked separately from the activities carried out by Oise CCI’s general arm. In addition, the accounts for Beauvais airport’s commercial activities were kept separately from those for its activities falling under the remit of the State for the purposes of calculating the airport tax levied by the French Civil Aviation Authority (direction générale de l’aviation civile) to finance airport infrastructure and equipment connected with tasks incumbent on the State. Oise CCI’s main accounting and commercial data relating to the management of the airport from 1997-2008 are summarised in Table 2: Table 2 Main accounting data for Oise CCI’s airport arm (000 €) (11) 1997 1998 1999 2000 2001 2002 Bus revenue 459 657 1 295 1 403 1 749 3 546 Ryanair revenue n/a n/a n/a n/a 706 848 Total revenue 2 566 2 892 4 153 4 199 5 264 13 109 Payments to Ryanair n/a n/a n/a n/a 462 534 Total expenditure 2 417 3 413 3 631 4 675 5 704 13 069 Net income 149 - 521 522 - 475 - 440 40 Net fixed assets 2 679 3 146 27 126 2 595 2 550 2 887 Balance sheet total 3 121 3 933 3 301 3 411 3 808 8 163 2003 2004 2005 2006 2007 2008 (12) Bus revenue 5 341 8 007 12 840 11 845 12 936 5 858 Ryanair revenue 1 502 2 379 2 777 2 904 3 425 1 643 Total revenue 16 915 18 934 26 982 30 525 33 264 17 933 Payments to Ryanair 834 1 146 1 272 1 348 1 558 765 Bus expenditure 6 078 6 210 6 403 2 821 Total expenditure 13 874 22 414 26 179 28 731 29 928 17 950 Net income 3 042 -3 480 803 1 794 3 335 -17 Net fixed assets 5 198 8 017 10 833 14 448 15 425 150 Balance sheet total 9 353 15 283 18 234 31 585 33 560 16 374

2.2.2. Management of the airport by SAGEB (since 1.6.2008)

(22) Following the award procedure referred to in recital 19, SMABT delegated (13) the operation of Beauvais airport to the Oise CCI-Veolia Transport consortium under a public service delegation agreement (‘the PSD agreement’) signed on 19 March 2008 (with effect from 1 June 2008) for a period of 15 years (14). Under the terms of the PSD agreement, as soon as it was set up, SAGEB automatically replaced the Oise CCI-Veolia Transport consortium as the entity to which the public service was delegated. The PSD agreement is still in force as at the date of adoption of this Decision.

(23) SAGEB is a simplified joint stock company (société par actions simplifiée, SAS) whose capital was originally held by Oise CCI (51 %) and Veolia Transport (49 %), the latter in turn held by the majority privately owned group Veolia Environnement (15). In March 2011, Veolia Transport was replaced by Veolia-Transdev (50 % owned by the Veolia Environnement group and 50 % by Caisse des Dépôts et Consignations), which took over all the shares held by Veolia Transport in SAGEB. SAGEB’s internal operation and organisation are described in recitals 291 et seq.

(24) Table 3 contains an overview of the successive contracts for the operation of Beauvais airport. Table 3 Operation of Beauvais airport – Overview Owner Period Operator Type of contract Date of contract State 1.1.1993-4.5.2002 CCI Oise AOT Prefectoral order of 1.10.1997 4.5.2002-29.2.2008 CCI Oise Concession agreement 30.1.2002 SMABT 1.3.2008-1.6.2008 CCI Oise 1.6.2008-31.5.2023 SAGEB PSD agreement 19.3.2008

3. DETAILED DESCRIPTION OF THE MEASURES

(25) The measures comprise, first, financial support granted by the local authorities to the successive managers of Beauvais airport and, second, financial support granted by the successive managers of Beauvais airport to a number of airlines.

3.1. Financial support to Beauvais airport

(26) There are two types of support granted to Beauvais airport: funding for investment in airport infrastructure and contributions paid for the operation of the airport.

3.1.1. Contractual framework for the grants made to Beauvais airport

3.1.1.1. The temporary authorisation to occupy the public domain (1.1.1993-3.5.2002)

(27) Under this authorisation, Oise CCI was entrusted, at its own risk, with installing, maintaining, renovating, operating and developing the works, land, buildings, installations, equipment and services needed for the operation of Beauvais airport (16). However, the State remained responsible for certain services connected with aviation safety, security and regularity (17), while Oise CCI provided fire-fighting and rescue services, bird hazard prevention and the aeronautical information service (18).

(28) Oise CCI derived its income in principle from airport charges and operating income (19). Financial support could also be granted to cover expenses arising from the task of installing and maintaining infrastructure with which Oise CCI had also been entrusted (20). For this expenditure, Oise CCI could also request funding from other public authorities under Article 3 of the AOT. In exchange, Oise CCI was required to pay the State a fee for occupying the public domain, which was set at FRF 1 000 per year.

3.1.1.2. The Beauvais airport concession agreement (4.5.2002-31.5.2008)

(29) The concession agreement of 4 May 2002, some of the clauses of which referred to the application of the standard specification set out in the Decree of 29 May 1997 (21), divided tasks between the State and Oise CCI. As the authority awarding the concession, the State performed and funded all air traffic services (22). Besides the commercial operation of the airport (23), Oise CCI was responsible for performing and funding itself certain safety and security-related services, such as fire-fighting and rescue, bird hazard prevention, and security checks on passengers, hold baggage and access to restricted areas of the aerodrome (24).

(30) Oise CCI derived its income in principle from the airport charges set by the concession agreement and from operating income (25). The safety and security-related services provided by Oise CCI as described in recital 29 were funded from the revenue from the airport tax and, if needed, by subsidies from the State (26).

3.1.1.3. The public service delegation agreement (1 June 2008-2023)

(31) The PSD agreement entrusts to SAGEB as its primary task the management and operation of Beauvais airport and, as its secondary task, the provision of bus links between Beauvais airport and Paris, both at the delegation holder’s own risk (27).

(32) Under the PSD agreement, SAGEB is financially responsible for the performance of all activities relating to the operation of Beauvais airport, except for the safety of air navigation and meteorological services (28). In addition, SAGEB is responsible for certain safety and security-related services (29), in exchange for a financial contribution from the State set either by the legislation in force (30) or in accordance with the type and volume of traffic at the aerodrome (31).

(33) As for the financial terms of the PSD agreement, SAGEB collects the revenue from aeronautical charges and other operating income from the airport and the operation of the Paris-Beauvais bus link. Conversely, SAGEB has to pay a fee for occupying the public domain to SMABT, which comes to around EUR 10,8 million over the duration of the agreement. Moreover, Annex 14 to the agreement provides, ‘in exchange for SMABT’s contribution to the funding of airport infrastructure, the concession holder undertakes to pay SMABT a share in profits calculated on the basis of any profit surplus compared with the estimated internal rate of return of 10 %’. The right to profit-sharing is triggered in year (n) if net income is positive, if the cumulative net income of years (1) to (n) is positive and if the resulting internal rate of return is higher than 10 %. The share in profits is set at 50 % of the excess profit.

(34) Furthermore, the PSD agreement requires SAGEB to make a series of investments during its validity (32), estimated at EUR 68,2 million, which SAGEB is obliged to finance by any means and for which SMABT will make a maximum contribution of EUR 14,5 million (33) (see recital 41)

3.1.2. The investment grants

(35) Investment grants were paid to the successive managers of Beauvais airport under three investment programmes implemented in the periods 2001-2006, 2007-2008, and 2008-2023.

3.1.2.1. The 2001-2006 investment programme (‘programme 1’)

(36) In 2001, Oise CCI applied for a financial contribution from the Department of Oise, the Region of Picardie and the Beauvaisis intermunicipal authority. In its application, Oise CCI outlined a programme to modernise and upgrade Beauvais airport at an estimated cost of FRF 53,3 million (EUR 6,825 million).

(37) The Department of Oise (34), the Region of Picardie (35) and the Beauvaisis intermunicipal authority (36) granted the application and awarded a total of EUR 4 311 395 (37) to Oise CCI, the rest of the costs being borne by the latter (EUR 2,55 million) (38). The grant was calculated not in relation to the specific costs set out in programme 1, but in relation to the overall cost estimate for the programme. The specific date for the start of the investments was set as 2 July 2001, and the investments had to be completed by 31 December 2006. This initial investment programme had to be modified during 2005 to take account, following a rise in passenger numbers, of regulatory constraints linked to the processing and safety of passengers (39). The investments planned and implemented under this programme can be summarised as follows: Table 4 Investments planned and implemented under programme 1 (EUR) Type of investment Estimated amounts Revised estimates (2005) Final amounts of investment West concourse (departures): Baggage security hall Baggage sorting hall Airport offices Canopy roof 1 687 153 2 600 000 2 608 000 East concourse (arrivals) Baggage handling hall Passenger walkway 228 674 160 000 164 000 Terminal modernisation 762 250 600 000 649 000 Safety and security equipment: Fire station construction Security fencing Airport security gates Hold baggage screening equipment 914 690 900 000 922 000 Access roads and utility services Car park Fire station (access roads and services) Upgrading existing access roads Waste water connection 762 245 873 480 1 238 000 463 467 Miscellaneous works 304 900 0 0 Environmental studies and works 533 570 60 000 62 000 Fees 623 210 623 210 744 000 Modernisation of operating equipment: Screening check points 1 048 310 1 048 310 1 264 000 133 000 TOTAL 6 865 000 6 865 000 7 650 000

(38) Despite higher than expected final costs, the local authorities referred to in recital 37 paid their contributions totalling EUR 4,311 million to Oise CCI as laid down in the funding agreements, the excess costs being borne by Oise CCI.

3.1.2.2. The 2006-2007 investment programme (‘programme 2’)

(39) Oise CCI carried out a second investment programme of EUR 9,5 million over a period of 2 years from 1 January 2006 to 31 December 2007. The Department of Oise, the Region of Picardie and the Beauvaisis intermunicipal authority agreed to make a financial contribution to this programme (calculated in relation to the overall cost estimate for programme 2, not in relation to specific costs), by agreements signed with Oise CCI on 11 December 2006, 11 July 2007 and 12 July 2007 respectively. The investment programme was as follows: Table 5 Investments planned and implemented under programme 2 (EUR) Type of investment Estimated amounts of investment Final amounts of investment Terminal extension 1 202 039 1 327 749 Security fencing 151 653 165 805 Upgrading of aircraft stands and taxiway 1 410 000 1 408 739 Renovation of hangars and runways 300 000 231 542 Passenger flow separation corridor 237 451 176 590 Staff car park complying with the Water Act 215 079 227 611 Car rental base 110 000 1 735 Land acquisitions ILS 150 000 61 540 Indoor and outdoor signage 50 000 10 510 Porte Maillot passenger reception area 189 873 213 548 Compliance with the Water Act 870 000 46 141 Upgrading ground marking 75 000 0 ILS studies 150 000 139 803 Modernisation of public access roads 1 350 000 1 053 861 Administrative offices 890 000 944 557 Heating upgrade 80 000 0 Terminal 2 studies 0 188 188 Fees and contingencies 500 000 745 123 Modernisation of operating equipment: Installation of border police booths Installation of a laser bird repellent 1 568 905 2 178 477 52 670 86 085 TOTAL 9 500 000 9 121 527

(40) The local authorities referred to in recital 37 undertook to contribute 74 % of the total investment amount, the rest being borne by Oise CCI, with the Region of Picardie and the Department of Oise contributing 25 % of the investment costs each (EUR 4,6 million in total) and the Beauvaisis intermunicipal authority 24 %, with a final grant of EUR 2,2 million to Oise CCI. Oise CCI thus received for this investment programme an investment grant of around EUR 6,8 million, corresponding to 74 % of the value of the investments carried out.

3.1.2.3. The 2008-2023 investment programme (‘programme 3’)

(41) As stated in recital 34, the PSD agreement requires SAGEB to carry out a programme of investments of EUR 68,2 million over the period 2008-2023, with funding from SMABT capped at EUR 14,5 million. Annex 6 to the PSD agreement set out the type and amount of these investments and the timetable for implementing them (40). The investments planned and implemented to date can be summarised as follows: Table 6 Investments planned and implemented under programme 3 (EUR million) Type of investment Initial estimated amounts Amounts executed at 31 December 2018 Revised estimates to be executed Construction Terminal T2 11,9 9,7 0,01 Upgrade Terminal T1 1,6 5 0,07 Establishment of ILS category III programme 13,6 14,4 0 Additional aeronautical infrastructure 3,3 4,2 0,2 Parking and commercial facilities 5,4 9,1 0,03 Environmental investment 2,9 1,6 0 Installation maintenance 8,5 3,3 0,12 Transfer of general aviation installations 0,7 1,5 0,04 Acquisition of safety and security equipment 10,2 8,7 2,1 Ground handling equipment and furniture 7,1 1,8 0,9 IT equipment 3 2,6 1,8 TOTAL 68,2 61,9 67,2

(42) As at 31 December 2018, investments worth close on EUR 62 million had been made by SAGEB. The investment forecasts from now until the expiry of the PSD agreement include a total estimated amount slightly below that originally included in the PSD agreement.

3.1.3. Operating subsidies

3.1.3.1. Direct payments

(43) The Commission made the preliminary observation that none of the concession agreements for the management and operation of Beauvais airport provided for the payment of operating subsidies to the successive airport managers (see section 3.1.1).

(44) None the less, the Commission pointed out in the opening decision that the successive managers had received various types of operating subsidy.

(45) First, the Commission found that between 2002 and 2008, the accounts of Oise CCI (airport arm) showed various operating subsidies paid by a number of bodies to Oise CCI’s airport arm totalling EUR 107 924,59. Table 7 Amount received in operating subsidies by Oise CCI’s airport arm (EUR) 2002 2003 2004 2005 2006 2007 2008 TOTAL 84 845,10 15 245 0 7 834,49 0 0 0 107 924,59

3.1.3.2. Cash advances

(46) Second, the French authorities had informed the Commission that Oise CCI’s general arm had paid zero-rate cash advances to the airport arm between 1995 and 2004 to deal with a risk of default linked to the numerous and urgent costs faced by the airport arm on account of the outdated infrastructure and considerable annual rise in traffic recorded in this period. Table 8 shows the amount of aid: Table 8 Cash advances made by Oise CCI’s general arm to the airport arm (EUR) Year Cash advance made for the year concerned Cumulative amount 1995 n/a 2 412 922,70 1996 888 508,49 3 301 431,19 1997 - 394 036,04 2 907 395,15 1998 323 559,53 3 230 954,68 1999 - 838 477,75 2 392 476,93 2000 - 176 603,94 2 215 872,99 2001 73 514,73 2 289 387,72 2002 142 970,85 2 432 358,57 2003 -2 198 307,33 234 051,24 2004 327 698,17 561 749,41 2005 - 561 749,41 0

3.1.3.3. Partial exemption from funding the tourism development plan

(47) Lastly, the Commission found that the PSD agreement included in Annex 19 a tourism development plan for Beauvais airport (41). According to this Annex, the plan set a target of turning 8 % of passengers into consumers/visitors for Beauvais, Oise and Picardie within 3 years of the entry into force of the PSD agreement. To achieve this target, the plan set out a number of actions to encourage Beauvais airport passengers to stay in the Beauvaisis area, the Oise department or the Picardie region (passenger surveys, image marketing, etc.) The plan was to be carried out by the Picardie regional tourism committee, the Oise department tourism committee and the Beauvaisis tourist office (‘the institutional tourism agencies’). The plan was to be funded by SMABT and the selected tenderer, namely SAGEB (50 % each).

(48) An agreement on objectives and means (convention d’objectifs et de moyens) was concluded on 15 October 2008 between SMABT, SAGEB and the institutional tourism agencies. It set out in detail the implementation of the tourism development plan contained in Annex 19 to the PSD agreement by the institutional tourism agencies. The agreement provided that the latter had to report on their activity directly to SMABT every year (as well as to the steering committee made up of all the signatories) (42). The agreement was concluded for a duration of 3 years with an annual budget of EUR 462 000 split 50-50 between SAGEB and SMABT and granted to allow them to implement the tourism actions agreed on.

3.2. Measures in favour of the airlines

(49) Between 1 May 1997 and 30 May 2012, various airport services contracts were concluded between the successive operators of Beauvais airport (first Oise CCI, then SAGEB) and a number of airlines.

(50) The contractual relationship between the airport operator and Ryanair took the form of an exchange of letters, while with the other airlines a formal contract was drawn up, either on the IATA (International Air Transport Association) model or as a one-off. All the contracts covered by this Decision are listed in Table 9.

(51) At the time the contracts RYAN4, RYAN5 and WIZZ3 were signed, SAGEB was operating Beauvais airport. When the other contracts were signed, Oise CCI was the airport operator. Table 9 List of airport services contracts concluded between the operators of Beauvais airport and the airlines Contract code Airline Airport operator Contract type Date signed Date in force Duration Ryanair RYAN1 Ryanair Oise CCI Letters 8.9.1998 1.1.1999 5 years RYAN2 Ryanair Oise CCI Letters 16.3.2001 Not specified Not specified RYAN3 Ryanair Oise CCI Letters 12.2.2002 Not specified 10 years RYAN4 Ryanair SAGEB Letters 4.2.2010 and 5.2.2010 1.5.2010 7 months RYAN5 Ryanair SAGEB Letters 27.7.2010 1.1.2011 1 year Wizz Air WIZZ1 Wizz Air Oise CCI Contract (IATA ground handling agreement) 11.6.2004 11.6.2004 5 years WIZZ2 Wizz Air Oise CCI Contract (IATA ground handling agreement) 1.7.2005 1.7.2005 3 years and 8 months WIZZ3 Wizz Air SAGEB Contract (‘Investment’ agreement and IATA ground handling agreement) 1.6.2009 1.6.2009 5 years Other airlines GOOD1 Goodjet Oise CCI Contract (one-off) 14.12.2001 14.12.2001 7 years CIAO1 Ciaofly Oise CCI Contract (one-off) 24.4.2002 24.4.2002 7 years BERL1 Berlin Jet Oise CCI Contract (one-off) 30.1.2003 30.1.2003 5 years VOLA1 Volare Oise CCI Contract (one-off) 13.2.2003 13.2.2003 5 years STER1 Sterling Oise CCI Contract (IATA ground handling agreement) 15.7.2004 31.3.2004 5 years NORW1 Norwegian Air Shuttle Oise CCI Contract (IATA ground handling agreement) 7.4.2005 31.3.2004 5 years AIRH1 Air Horizons Oise CCI Contract (one-off) 12.7.2004 18.7.2004 1 year AIRP1 Air Polonia Oise CCI Contract (one-off) 20.10.2004 20.10.2004 5 years BLUE1 Blue Air Oise CCI Contract (IATA ground handling agreement) 11.10.2005 11.10.2005 1 year BLUE2 Blue Air Oise CCI Contract (one-off) 28.8.2007 26.3.2007 8 months FLYM1 Flyme Oise CCI Contract (IATA ground handling agreement) 30.3.2006 31.3.2006 5 years CENT1 Centralwings Oise CCI Contract (IATA ground handling agreement) 18.2.2007 19.2.2007 1 year

(52) The various contracts were all different; their key features are summarised in Table 10. Several included the possibility of the Beauvais airport operator’s paying a financial contribution to the airline in exchange for the traffic it brought. However, none of the contracts mention marketing payments by the Beauvais airport operator in exchange for advertising by an airline. Table 10 Features of airport services contracts concluded between the operators of Beauvais airport and the airlines Contract code Key features of the contracts Ryanair RYAN1 This contract provided for the operation of two routes from Beauvais on the following terms: — Dublin: the contract included three weekly turnarounds (two on Saturday and one on Sunday) for a landing fee of FRF 750 (EUR 114,37). For any new additional daily turnaround, the airline was exempted from the landing fee. The contract also included a fee of FRF 10 (EUR 1,52) per departing passenger. — Prestwick: the contract included a daily turnaround in exchange for a fee set at FRF 750. For any additional daily turnaround, the landing fee was set at FRF 500 (EUR 77,22). The contract also included a fee of FRF 10 (EUR 1,52) per departing passenger. RYAN2 The terms of the RYAN1 contract were amended as follows: — For the Dublin route, the landing fee was set at FRF 750 for up to 19 weekly turnarounds. Above that number, Ryanair was exempt from the landing fee. — For the Prestwick route, the landing fee was set at FRF 750 for up to 7 weekly turnarounds, and FRF 500 for between 8 and 14 weekly departures. Above 14 weekly departures, Ryanair was exempt from the landing fee. — For any new route launched by Ryanair, the landing fee was set at FRF 500 for one daily turnaround. For any additional turnarounds, Ryanair was exempt from the fee. — The fee per departing passenger was set at FRF 10 for the existing routes, FRF 6 (EUR 1,22) for new routes for up to 6 daily turnarounds, and FRF 4 (EUR 0,61) above that. RYAN3 This contract replaced the RYAN1 and RYAN2 contracts. It set the terms under which Ryanair operated its air services as follows: — For 2002, a target of 210 000 passengers departing from Beauvais was assigned to Ryanair. The landing fee was set at FRF 750 for all routes operated by the airline. — For 2003, a target of 310 000 passengers departing from Beauvais was assigned to Ryanair. The landing fee was set at FRF 750 for up to 7 daily turnarounds and FRF 650 (EUR 99,09) above that. — For 2004, the passenger target was 410 000 passengers. The landing fee was set at FRF 750 for up to 7 daily turnarounds, FRF 600 (EUR 91,47) for between 8 and 10 daily turnarounds and FRF 400 (EUR 60,98) above that. — The departing passenger fee was set at FRF 8/passenger for up to 135 passengers per aircraft (FRF 0 above that) for each year over the duration of the contract. This contract remained valid until 4 February 2010 on the terms established for 2004. RYAN4 This contract amended contract RYAN3 by adding the following elements: Ryanair undertook to operate 10 additional weekly turnarounds on new routes. In exchange the airport manager paid a financial contribution to Ryanair of EUR 1,5 per departing passenger on the new routes. RYAN5 This contract amended contract RYAN4. Under this contract, SAGEB undertook to pay Ryanair a financial contribution of EUR 2 per departing passenger for each additional passenger carried in 2011 compared with the number of passengers carried by Ryanair in 2010. In exchange, Ryanair undertook to operate 26 additional turnarounds per week. Wizz Air WIZZ1 In this contract, the landing fees were set for Wizz Air as follows: — EUR 500 for the first daily turnaround; — EUR 450 for the second and third daily turnarounds; — EUR 400 for subsequent daily turnarounds. The airport manager undertook to pay the airline, for the first 4 years of the contract, a financial contribution in accordance with the number of departing passengers in an amount of one euro per departing passenger, capped at EUR 40 000 , 30 000 , 20 000 and 10 000 respectively in the first, second, third and fourth years. The contract included other optional services such as cleaning the aircraft. The airline was exempt from departing passenger fees. WIZZ2 This contract amended WIZZ1. The landing fee was now set at EUR 425 for all turnarounds. The financial contribution paid by the airport manager was set at EUR 0,75 per departing passenger. WIZZ3 The landing fees were set as follows: — EUR 425 for up to 20 weekly turnarounds; — EUR 42,5 for between 21 and 32 weekly turnarounds; — EUR 21,25 for more than 33 weekly turnarounds. The airline was exempt from departing passenger fees. The airport operator undertook to pay the airline a financial contribution per departing passenger of EUR 0,375 for between 0 and 20 weekly turnarounds, EUR 1,375 for between 21 and 26 weekly turnarounds, EUR 1,725 for between 27 and 32 weekly turnarounds and EUR 1,925 above that. The contract included other optional services such as cleaning the aircraft. Other airlines GOOD1 This contract established a schedule of 24 weekly turnarounds. The landing fee was set at FRF 4 000 (EUR 609,8) and the airline was exempt from the departing passenger fee. CIAO1 This contract set a landing fee of EUR 305 and exempted the airline from the departing passenger fee. BERL1 This contract provided for one weekly turnaround. The landing fee was set at EUR 500 and the airline was exempt from the departing passenger fee. VOLA1 This contract provided for five daily turnarounds. The landing fee was set at EUR 450 and the departing passenger fee at EUR 2,13. The airport manager undertook to provide financial support for launching routes of up to EUR 100 000 per route. STER1 This contract set the landing fee at EUR 576 for up to 3 weekly turnarounds, EUR 540 for between 4 and 6 weekly turnarounds and EUR 500 for more than 7 weekly turnarounds. The airline was exempt from departing passenger fees. The contract included other optional services such as cleaning the aircraft. NORW1 This contract set the landing fee at EUR 500 for up to 6 weekly turnarounds and EUR 400 for more than 7 weekly turnarounds. The airline was exempt from departing passenger fees. The contract included other optional services such as cleaning the aircraft. AIRH1 This contract established a schedule of 5 weekly turnarounds. The landing fee was set at EUR 147,38 and the departing passenger fee at EUR 2,89. The airport manager undertook to pay the airline a financial contribution of EUR 0,5 per departing passenger. The contract also included optional services such as cleaning the aircraft and other services. AIRP1 This contract provided for one turnaround a day. The landing fee was set at EUR 192,88 and the departing passenger fee at EUR 2,89. The contract also included optional services such as cleaning the aircraft. BLUE1 This contract set the landing fee at EUR 600 and waived the departing passenger fee for the airline. BLUE2 This contract amended BLUE1 in respect of the amount of the landing fees, now set at EUR 450. FLYM1 This contract provided for a minimum of 4 weekly turnarounds. The landing fees were set at EUR 600 for type B737-300 aircraft (136 seats) and EUR 550 for type B737-500 aircraft (125 seats). The airline was exempt from the departing passenger fee. CENT1 This contract set the landing fee at EUR 500 for up to 3 weekly turnarounds, EUR 450 for between 4 and 7 weekly turnarounds and EUR 400 for more than 7 weekly turnarounds. The airline was exempt from departing passenger fees. The airport manager undertook to pay the airline a financial contribution of EUR 0,75 per departing passenger for the first 6 months, and EUR 0,50 for the last 6 months.

4. GROUNDS FOR INITIATING THE FORMAL INVESTIGATION PROCEDURE

4.1. Financial support to the successive operators of Beauvais airport

(53) First, the Commission expressed doubts that the financial support granted to Oise CCI and SAGEB did not involve State aid.

(54) The Commission had doubts as to whether certain activities of Beauvais airport funded by the public authorities fell under the public authority remit. The Commission also had doubts about whether the conditions established by the Altmark (43) ruling were met by the measures for Beauvais airport included in programme 3. The Commission commented that the grounds cited by the public authorities for the investment grants did not refer to their direct financial return. The Commission therefore questioned whether those investments were in line with the market economy investor principle (‘MEO principle’). Lastly, the Commission came to the preliminary finding that the measures were imputable to the State, were selective, and were likely to distort competition and affect trade within the EU.

(55) Second, the Commission expressed doubts about the compatibility of the investment aid and the operating aid with the internal market pursuant to Article 107(3)(c) TFEU.

(56) An assessment of the compatibility with the internal market of the measures in favour of the operators showed that, while all the measures met an objective of general interest, their necessity and proportionality in the light of that objective had not been demonstrated. The Commission also had doubts about the medium-term prospects for use of the infrastructure.

4.2. Measures in favour of the airlines

(57) In its opening decision, the Commission came to the preliminary view that the signature of the contracts by the airport operator (Oise CCI, then SAGEB) with the airlines involved the use of State resources and that the decisions to conclude the contracts were imputable to the State.

(58) The Commission was not in a position to give a view on whether the airlines enjoyed a selective advantage. The information at its disposal was insufficient to determine whether the airport manager had behaved like a prudent market economy investor. The Commission invited France and interested parties to provide it with further information.

(59) The Commission came to the preliminary conclusion that the measures were likely to distort competition and affect trade within the EU.

(60) Lastly, the Commission expressed doubts as to the compatibility with the internal market of the aid measures in favour of the airlines. In particular, the Commission took the preliminary view that the measures involving aid for new routes did not meet the criteria for compatibility with the internal market.

5. COMMENTS BY FRANCE

5.1. Financial support to Beauvais airport

5.1.1. Investment aid

(61) France informed the Commission that it ‘did not intend in respect of Beauvais airport to rely on the notion of service of general economic interest for any of the investment grants received by the local authorities and paid over to the successive holders of the concession for Beauvais airport (Oise CCI, then SAGEB)’ (44).

(62) France also indicated that it did not intend to rely on the application of the MEO principle to the investment grants paid to the successive holders of the concession for Beauvais airport (Oise CCI, then SAGEB) (45).

(63) However, France took the view that the grants could not be classed as State aid or incompatible State aid on the grounds that they were linked to funding activities under the remit of the public authorities or that their compatibility with the internal market could be demonstrated.

5.1.1.1. The funding of activities under the remit of the public authorities

(64) France clarified that the grants disbursed under programme 1 for activities falling under the public authority remit, worth EUR 1 110 669 in total, were as follows (46): — grants for safety and security equipment (EUR 922 000); — grants for modernising the screening check points (EUR 133 000); — grants totalling EUR 55 669 for fees and depreciation costs linked to and declared under the public-remit tasks.

(65) France clarified that the grants disbursed under programme 2 for activities falling under the public authority remit, worth EUR 567 782 in total, were as follows: — grants of EUR 52 670,98 for installing border police booths and EUR 86 085,57 for a laser bird repellent; — grants of EUR 165 805 for installing security fencing and EUR 617 for modernising screening check points; — a grant of EUR 176 590 for a flow separation corridor; — grants totalling EUR 86 632 for fees and depreciation costs linked to and declared under the public-remit tasks common to the investment programmes.

(66) The grants linked to the public-authority remit over the period 2001-2008 therefore came, according to France, to EUR 1 678 451.

(67) France also identified three investments scheduled in the PSD agreement for the 2008-2023 period that were linked, in its view, to activities falling under the public-authority remit: — installation of an all-weather instrument landing system (category III ILS) for EUR 14 381 000; — investments to locate flying clubs and private owners together in the ‘leisure’ zone to the north of the airport for a grant of EUR 1 442 000; — supply and fitting out of a 50 m2 space in Terminal T2 for the institutional tourism agencies (under ‘construction of Terminal T2’) for an amount of EUR 54 000.

(68) According to France, the total amount of the investments referred to in recital 67 and implemented under the PSD agreement (2008-2023) came to EUR 15 877 million. Thus, the maximum grant of EUR 14,5 million paid to SAGEB under the PSD agreement constituted consideration for the investments linked to activities falling under the public-authority remit and therefore could not be classed as State aid.

(69) France outlined the following arguments to demonstrate that the investments referred to above fell under the remit of the public authorities: — the tasks connected with these investments were performed either directly by the State, or on its instructions; — the tasks connected with these investments were required under European and national rules; — the tasks connected with these investments were performed in the general interest or public interest (e.g. protection of human life, aviation security, border police, animal hazard prevention, air traffic services, tourism development); — the performance of the tasks connected with these investments by the successive airport concession holders was entirely non-commercial; — it had been recognised by EU and French case-law that the tasks connected with these investments fell under the remit of the public authorities.

(70) Specifically with reference to the all-weather instrument landing system, France argued that this fell under the provision of air navigation services, which was a public-authority task. The system was designed to prevent aircraft collisions on landing and in the manoeuvring area, expedite and maintain an orderly flow of air traffic, and provide advice and information useful for the safe and efficient conduct of flights. However, France pointed out that such systems were not installed by right at airport hubs and were not covered by the airport tax.

(71) As for the investments in locating flying clubs and private owners together to the north of Beauvais airport, France considered that this measure put a stop to the movement of the aircraft, passengers and staff of flying clubs and private owners across the restricted access zones, thus ensuring better control of access to these zones and better guaranteeing flight safety, which was a task under the responsibility of the public authorities.

(72) France also took the view that fitting out a space of 50 m2 in Terminal T2 for the institutional tourism agencies allowed them to carry out their task of promoting local tourism at Beauvais airport. In France’s view, developing tourism was a public-authority task, to which the fitting out of the dedicated space was connected.

5.1.1.2. Compatibility of the investment aid with the internal market

(73) The French authorities informed the Commission that they endorsed the application to the case in hand of the criteria from the Guidelines in force at the time of the investment aid measures, in accordance with point 173 of the 2014 Guidelines.

(74) France argued that all the investment grants were compatible with the internal market in the light of the compatibility criteria laid down in the 2005 Community guidelines on financing of airports and start-up aid to airlines departing from regional airports (47) (‘the 2005 Guidelines’).

Clearly defined objective of general interest

(75) According to France, all the measures at issue were such as to meet a clearly defined objective of general interest, namely local economic development. Moreover, the Commission had in the past found that airport safety and security constituted an objective of general interest and, in the case at hand, most of the investment over the relevant period also met this objective.

The infrastructure is necessary and proportionate to the objective

(76) France stated that the infrastructure put in place was indispensable to the smooth functioning of Beauvais airport in view of the increase in passengers that could reasonably be expected. Most of the investment corresponded to urgent work on security and upgrading at Beauvais airport in a situation of rapid growth in air traffic at the airport.

(77) Moreover, these investments were proportional to the objective in so far as, according to France, the investment amount was always extremely conservative, in particular as it was based on very low traffic forecasts compared with the traffic volumes actually achieved. The investments could have been much more far-reaching and far more costly in view of the traffic volumes actually achieved.

The infrastructure has satisfactory medium-term prospects for use

(78) France stressed that the investments made at Beauvais airport during the period 2001-2006 were based on traffic assumptions of 600 000 passengers for 2006. The investments under programme 2 were also based on a traffic assumption of 18 000 movements in the medium term, and programme 3 had been drawn up by SAGEB to take account of a reference scenario involving a maximum of 21 000 movements per year.

(79) The growth in flights operated by Ryanair observed at the time of the decisions on the investment programmes and the geographical proximity of Paris tended to confirm the positive prospects for use in the medium term.

All potential users of the infrastructure have access to it in an equal and non-discriminatory manner

(80) France stated that no airline operating at Beauvais airport nor any of their passengers had been given an advantage in terms of access to the different equipment and infrastructure provided by the airport.

Trade is not affected contrary to the common interest

(81) In France’s view, the existence of Beauvais airport relieved the air traffic congestion at the Paris airports, particularly Roissy-Charles de Gaulle.

(82) Moreover, without denying that Beauvais airport might attract some of the customers from Roissy-Charles de Gaulle airport, France explained that this should be viewed in proportion to the greater accessibility and number of destinations offered by the latter, and to the curfew imposed at Orly airport. As for Amiens and Rouen airports, they had not developed any commercial traffic.

Necessity and proportionality of the aid

(83) The aid intensity for programme 1 was around two thirds of the total amount to be financed. For programme 2 the aid intensity was as high as 74 %, but this could be explained by the short depreciation period of the works (just over one year) because of the short period during which the concession agreement between the State and Oise CCI was extended. For programme 3, France estimated the aid intensity at around 21,26 %, pointing out that this was a ceiling and that the final aid amount might be lower depending on the investments actually carried out.

(84) France explained that the high intensity of the aid granted to Oise CCI for the investment programmes 2001-2006 and 2006-2008 was necessary in so far as without this aid, Oise CCI would not have been able to implement all the investments decided upon and could therefore not have met the need to upgrade and increase the security of the infrastructure. France stressed in this connection that Oise CCI had taken out a loan to cover its share of the funding under the two investment programmes, so it could not have made a bigger contribution.

5.1.2. Operating aid

(85) First, as regards the operating aid, France argued that Oise CCI had received very low amounts in subsidies over the period 1996-2008. These subsidies could not therefore have distorted competition or affected trade between Member States.

(86) Of the EUR 107 924,59 received, France estimated that: — a grant of EUR 68 000 disbursed in 2002 was to finance the exceptional measure of increasing the rate of passenger hand baggage checks from 25 % to 50 % after the attacks of 11 September 2001; — a sum of EUR 1 600,10 paid in 2002 corresponded to a transfer from the Association for managing funds for the integration of people with a disability (Association de gestion du fonds pour l’insertion des personnes handicapées), in reimbursement of a surplus contribution by Oise CCI; — an amount of EUR 2 005 paid in 2005 corresponded to a transfer from the national centre for the development of farm structures (centre national pour l’aménagement des structures des exploitations agricoles); — a sum of EUR 5 829,49 paid out in 2005 corresponded to a grant from the town of Tillé for sanitation work linked to the connection of pavilions belonging to the airport concession to the public waste water system, which Oise CCI did on behalf of the town; — two grants of EUR 15 245 each corresponded to the reimbursement by the department of Oise for tourism promotion services performed by the staff of Oise CCI’s airport arm.

(87) France explained that the grant of EUR 68 000 was linked to a security task and therefore did not constitute State aid. As regards the other payments, they were no more than a fair consideration for services carried out by Oise CCI or reimbursement of excessive contributions to associations of which Oise CCI was a member.

(88) Second, as regards the advances from Oise CCI’s general arm to its airport arm, France took the view that the advances granted before the Aéroports de Paris judgment of 12 December 2000 did not constitute aid in accordance with point 29 of the 2014 Guidelines. Therefore, only the advances granted in 2001, 2002 and 2004 could constitute State aid.

(89) Furthermore, the advances made in 2001 and 2002 (which had been repaid in full) were granted at a time when Beauvais airport had recorded, in the two financial years preceding the one in which the aid was granted, traffic of less than 700 000 passengers per year. In accordance with point 118 of the 2014 Guidelines, the airport was unlikely to be able to cover its operating costs to a substantial extent, which justified the zero rate. Regarding the advance made in 2004, France took the view that Beauvais airport had, in the two financial years preceding the one in which the aid was granted, recorded traffic of between 700 000 and 1 million passengers per year. On top of the interest waived on this advance of 2004, France emphasised that Beauvais airport was not covering all its operating costs and therefore certainly met the requirements of point 118 of the 2014 Guidelines.

(90) Lastly, regarding the advantage granted to SAGEB in the form of the exemption from tourism expenditure that it should have borne as the airport manager, France argued that SAGEB had neither the authority nor the remit for local and regional tourism development and that it had not received any subsidy in this connection.

(91) France asserted that tourism development was a State task pursuant to national legislation. The tourism development plan could be implemented only by the local authorities (SMABT in this instance) and was not designed to boost business at the airport but rather to encourage regional tourism. France added that the objectives of the tourism development plan had been set by SMABT alone and implemented by the tourism agencies, with no input or influence from SAGEB. On the contrary, SAGEB had to contribute financially to the initiatives and supply if needed the means for these agencies to carry out their tasks (premises, advertising within the airport, etc.).

(92) France further stated that none of the initiatives under the tourism development plan had the objective of promoting Beauvais airport or the flight destinations it offered. Media used by SAGEB to that end were outside the scope of the tourism promotion remit and were financed by SAGEB from its own funds.

(93) Since none of the grants covered in these comments (with the exception of the cash advances in 2001, 2002 and 2004) constituted State aid, France found that there was no need to demonstrate their compatibility with the internal market. In any event, the French authorities stated that they endorsed the application to the case in hand of the criteria set out in point 137 of the 2014 Guidelines in respect of the operating aid.

5.2. Measures in favour of the airlines

(94) France argued that the airport operator (Oise CCI, then SAGEB) behaved like a prudent market economy investor. All the contracts generated incremental profitability and did not confer an advantage on the airlines within the meaning of Article 107(1) TFEU.

(95) France also stressed that the Beauvais airport operators never signed a marketing contract for the supply of marketing services (publicity on a website or equivalent) by an airline. The marketing contributions that the operators paid under certain contracts were incentives for the airlines to develop their traffic, that generated additional revenue for the operators (bus, non-aeronautical revenues).

(96) France stated that Oise CCI was not able to provide economic analyses conducted prior to the signature of the individual contracts with the airlines when it was the airport operator. However, Oise CCI acted like a market economy investor despite the absence of ex ante economic analyses and systematically took decisions on accepting a new airline or opening new routes with a view to developing a profitable airport business. In this connection, France supplied a general budget simulation (for the entire airport business) carried out ex ante by Oise CCI for the period 2001-2006. According to this simulation, the airport could generate a positive overall cash-flow from developing the business of Ryanair and other airlines (75 % and 25 % respectively of projected revenue in 2006).

(97) Following the opening decision, France reconstructed incremental business plans for the contracts concluded by Oise CCI and the airlines referred to in Table 9 (with the exception of the RYAN1 and RYAN2 contracts for which no reconstructed business plan was provided). France indicated that these business plans had been reconstructed on the basis of information known to Oise CCI before the conclusion of the contracts and on the basis of traffic, revenue and cost assumptions that would have been deemed reasonable prior to the signature of the contracts. These reconstructed business plans show that, on the basis of the assumptions adopted by France, Oise CCI could legitimately expect to generate a profit when signing each of the contracts with the airlines.

(98) France supplied the economic analyses (project summaries, business plans) carried out by SAGEB, Beauvais airport operator at the time, ahead of all the contracts signed by it and listed in Table 9, namely RYAN4, RYAN5 and WIZZ3. These economic analyses showed that the contracts generated a profit for the airport operator. Following the opening decision, France indicated that these analyses were based on average costs, rather than incremental costs. France therefore submitted revised versions of these three analyses (i.e. produced after the contracts had been signed) based on an incremental rise in costs, that confirmed that the three contracts did generate incremental profits for SAGEB.

(99) France therefore argued that SAGEB did not receive any operating subsidies (aside from those relating to the public-authority tasks), and that the risks and responsibilities borne by SAGEB were shared between Oise CCI and Véolia. In particular, by virtue of the shareholder agreement signed between Oise CCI (51 % of the votes) and the private company Véolia (49 % of the votes), SAGEB’s decisions to sign the contracts with the airlines were subject to the approval of the shareholders by a qualified majority of 75 % of the votes. The contracts signed by SAGEB thus could not be signed without the approval of Véolia, and the latter’s endorsement of the contracts with the airlines was evidence that they conformed to market practice.

(100) France also submitted that no investment at the airport was made for the benefit of a specific airline. The airport operator had entered into contact with numerous airlines in order to diversify its customer base. Even though Ryanair accounted for 80 % to 90 % of airport traffic between 1999 and 2011, the infrastructure was accessible on non-discriminatory terms to all the airlines and was constructed as part of an airport development plan without being linked to a specific contract.

6. COMMENTS BY INTERESTED PARTIES

6.1. Comments by interested parties on the application of the 2014 Guidelines to the case at hand

6.1.1. Joint comments from Oise CCI, SMABT and SAGEB

(101) As regards the investment grants covered by this Decision, Oise CCI, SMABT and SAGEB understood that their compatibility would be assessed in the light of the 2005 Guidelines. Furthermore, the grants made to Beauvais airport before 12 December 2000 would not be contested on the basis of the State aid rules, in accordance with the Aéroports de Paris ruling (48).

(102) As regards the financial relations between Beauvais airport and airlines operating there, Oise CCI, SMABT and SAGEB understood that they would be assessed in the light of the new 2014 Guidelines.

6.1.2. Comments by Air France

(103) In connection with the investigation, Air France submitted comments restricted to the application of the 2014 Guidelines. Air France contested the retroactive application of the 2014 Guidelines to cases involving operating aid to airports even where such aid had been disbursed before they had been published, on a number of grounds: — According to Air France, retroactive application of the 2014 Guidelines favoured unscrupulous operators by legitimising behaviour that did not comply with the rules applicable at the time. By contrast, operators who did comply with the previous Guidelines by refraining from claiming public funds were penalised. — Air France also emphasised that the retroactive application of the 2014 Guidelines to operating aid granted to airports was contrary to the general principles of law and to EU case-law. — Air France claimed that the 2014 Guidelines would have the effect of favouring new operators to the detriment of incumbent operators. By allowing a new airline to pay only the incremental cost associated with its activity, they would discriminate against incumbent operators at the airport, who were subject to higher fees. — Lastly, Air France commented that, although the condition of non-discriminatory access to the infrastructure of an airport may seem easy to meet in theory, the situation was quite different in practice, with certain operating models being consciously disadvantaged.

6.2. Joint comments from Oise CCI, SMABT and SAGEB

(104) Oise CCI, SMABT and SAGEB submitted joint comments to the Commission.

6.2.1. Financial support to Beauvais airport

(105) Regarding the investment aid and the operating aid covered by the formal investigation procedure, Oise CCI, SMABT and SAGEB referred in full to the comments submitted by France.

(106) Oise CCI, SMABT and SAGEB further supplied in support of the arguments submitted by France an analysis of the competition exerted by Beauvais airport on the passenger transport market, produced by the independent consultant Microeconomix. This study concluded that the aid to Beauvais airport had not affected trade to an extent contrary to the common interest.

(107) First, according to the study, the aid paid to Beauvais airport had not affected competition with the two other Paris airports, Roissy and Orly. The study did not rule out demand substitutability, at least in part, between Roissy and Orly airports and Beauvais airport, as the catchment area of the three airports partly overlapped (49). Beauvais airport hosted exclusively low-cost traffic between 2000 and 2011, while Orly and Roissy also had low-cost traffic, but it accounted in 2011 for only 13,6 % of total traffic for the two airports, i.e. a minority share (50). None the less, the study ruled out the possibility of the investment aid’s affecting trade on the following grounds: — The study showed that Beauvais airport’s market share remained low (e.g. 4 % in 2011) within the regional airport market that it formed with Roissy and Orly airports. Specifically on the low-cost market in the Paris region, Beauvais airport’s market share came to 31 % in 2011, compared with the shares of Roissy and Orly. — The aid did not prevent the development of low-cost traffic at Orly and Roissy. The share of low-cost increased as a proportion of total traffic at the two airports by 5,7 % between 2009 and 2010, then 11,3 % between 2010 and 2011. So, even if the development of Beauvais airport might have restricted the number of new low-cost routes opened in the other two airports, it did not block its development. — The study stressed that none of the airlines operating at Beauvais airport were present in the two other Paris airports and that certain destinations were only offered from Beauvais (Bari, Bergen, Cagliari, Cluj-Napoca, Katowice, Lodz and Shannon). — Detailed analysis of a sample of destinations served by Roissy, Orly and Beauvais (51) in fact showed fierce competition between Orly and Roissy and relative autonomy for Beauvais airport’s traffic. For example, on the Paris-Barcelona route, offered by the three Paris airports, the study showed that demand at Roissy contracted significantly between 2008 and 2010, which resulted in a strong increase in demand at Orly, while traffic at Beauvais (52) remained stable over the same period. This was even more noticeable on the Paris-Rome or even Paris-Milan routes, where the Roissy and Orly curves broadly correlated, while the Beauvais distribution curve bore no relation to them. On the Dublin and Stockholm routes, offered only at Beauvais and Roissy airports, when the traffic fell between 2007 and 2011 at Beauvais airport, it also fell (for Dublin) or stagnated (for Stockholm) at Roissy. — The study showed that if there was substitutability between Beauvais airport and the other Paris airports, it was limited. It remained far easier to access Orly and Roissy from Paris by any means of transport (53). Thus, only passengers with low sensitivity to access times (and thus high price sensitivity) were likely to consider Beauvais airport as a credible alternative to the other two Paris airports. — The study also stressed that the presence of Beauvais airport had reduced congestion at the Paris airports (Roissy and Orly). Orly in particular was subject to a cap on air traffic movements that it had almost reached in 2011, making it a saturated airport that would not have seen, or only to a limited extent, an increase in traffic in the absence of Beauvais airport. As for Roissy, the study referred to a report of March 2011 by the European Commission finding that the airport would face demand in excess of its capacity by 2025.

(108) Second, according to the study, the development of Beauvais airport did not affect potential competition with other (rail) links from Paris to national and international destinations (54).

6.2.2. Financial support to the airlines

(109) Oise CCI, SMABT and SAGEB indicated that Oise CCI and SAGEB, as successive operators of Beauvais airport, acted, in their contractual relations with the airlines operating flights from and to the airport, in accordance with the MEO principle.

(110) Oise CCI, SMABT and SAGEB referred in this connection to the analyses done by France, and also sent the Commission a detailed business plan relating to the contract of 12 February 2002 concluded with Ryanair. In their view, the business plan showed the profitability prospects of this contract for the economic activity of the airport.

6.3. Comments by the airline Ryanair

(111) Ryanair submitted comments only in respect of the financial support granted to the airlines by the successive managers of Beauvais airport covered by this Decision. Its comments were as follows.

(112) First, Ryanair disputed the assertion that the airport services contracts concluded in this case were imputable to the State and financed through State resources. Oise CCI was not just another facet of the French State and imputability could not be established solely on the basis that Oise CCI was a public undertaking and therefore under the control of the French State. Nor were the charges the only revenue for Oise CCI, which had its own revenue from its commercial activities. As for SAGEB, given its capital ownership, Ryanair doubted whether it could be considered to act under the control and instructions of the public authorities.

(113) Second, Ryanair took the view that the airport services contracts had been concluded in accordance with the MEO principle.

(114) The Commission should compare the agreements concluded with Beauvais airport with the contracts concluded with airports that behaved like private investors. Referring to the case-law of the Court of Justice (55), it argued that only where no MEO test was possible should the Commission adopt a cost-based approach.

(115) Moreover, even if the Commission were to take a cost-based approach, Ryanair believed that the airport services contracts had been concluded in line with the MEO principle and had been very profitable for Beauvais airport. In support of its arguments, Ryanair supplied a study by the independent consultant Oxera showing that all the airport services contracts it had signed with Beauvais airport were in line with the MEO principle (56).

(116) Since the measures did not constitute State aid within the meaning of Article 107(1) TFEU, there was no reason to examine their compatibility with the internal market.

6.4. Comments by the airline Wizz Air

(117) Wizz Air submitted comments only in respect of the financial support granted to the airlines by the successive managers of Beauvais airport covered by this Decision. Its comments were as follows.

(118) First, Wizz Air disputed the assertion that the airport services contracts concluded in this case were imputable to the State and financed through State resources. Oise CCI was not just another facet of the French State and imputability could not be established solely on the basis that Oise CCI was a public undertaking and therefore under the control of the French State. In particular, France had no power to take part in Oise CCI’s decision-making, the role of the French State being confined to the oversight of certain decisions. Nor were the charges the only revenue for Oise CCI, which had its own revenue from its commercial activities. As for SAGEB, given its capital ownership, Wizz Air doubted whether it could be considered to act under the control and instructions of the public authorities. Such an approach would be contrary to the Stardust Marine case-law, according to which ‘the criterion of control of an undertaking by the State is not, purely on its own, sufficient to establish that the conduct of that undertaking is imputable to the State’ (57).

(119) Second, Wizz Air took the view that the airport services contracts had been concluded in accordance with the MEO principle.

(120) Like Ryanair, Wizz Air believed that the Commission should compare the agreements concluded with Beauvais airport with the contracts concluded with airports that behaved like private investors. Referring to the case-law of the Court (58), Wizz Air argued that only where no MEO test was possible should the Commission adopt a cost-based approach (59).

(121) Moreover, even if the Commission were to take a cost-based approach, Wizz Air believed that the airport services contracts had been concluded in line with the MEO principle and had been very profitable for Beauvais airport. In support of its arguments, Wizz Air supplied a study by the independent consultant Oxera showing that all the airport services contracts it had signed with Beauvais airport were in line with the MEO principle (60).

(122) Wizz Air confirmed the Commission’s position that the MEO principle had to be applied in the light of all the contractual and commercial agreements concluded with the successive managers of Beauvais airport. The airport services contract concluded between Wizz Air and Oise CCI in 2005 set a marketing contribution for Oise CCI at EUR 0,75 per passenger departing from Beauvais. This contribution had been reduced to EUR 0,375 per departing passenger in the airport services contract of 1 June 2009. According to Wizz Air, these payments were not intended for it, but were paid directly into a bank account and used exclusively to pay third parties with no link to Wizz Air that supplied marketing services such as advertising campaigns in print media or online.

7. COMMENTS BY FRANCE ON THE INTERESTED PARTIES’ COMMENTS

(123) France had no comments on the submissions by interested parties.

8. ASSESSMENT OF THE MEASURES

8.1. Financial support to Oise CCI and SAGEB

8.1.1. Existence of aid within the meaning of Article 107(1) TFEU

(124) Article 107(1) TFEU states that ‘any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market.’

(125) For a measure to be classed as State aid, therefore, all of the following criteria have to be met: — the beneficiary must be an undertaking within the meaning of Article 107(1) TFEU, which presupposes that it carries on an economic activity, — the measure in question must be granted through State resources and be imputable to the State, — the measure in question must confer an economic advantage on its beneficiary or beneficiaries; — the measure in question must be selective in that it favours certain undertakings or the production of certain goods, and — the measure in question must distort or threaten to distort competition and be likely to affect trade between Member States.

8.1.1.1. Investment grants

Economic activity

(126) Article 107(1) of the Treaty does not apply where the State acts ‘by exercising public power’ (61) or where public entities act ‘in their capacity as public authorities’ (62). An entity may be deemed to act by exercising public power where the activity in question forms part of the essential functions of the State or is connected with those functions by its nature, its aim and the rules to which it is subject. Moreover, the 2014 Guidelines (63) specify that not all the activities of an airport are necessarily of an economic nature. The Court has held that activities that normally fall under the responsibility of the State in the exercise of its powers as a public authority are not of an economic nature and in general do not fall within the scope of the rules on State aid. At an airport, activities such as air traffic control (64), police (65), customs, firefighting (66), activities necessary to safeguard civil aviation against acts of unlawful interference and the investments relating to the infrastructure and equipment necessary to perform those activities are considered in general to be of a non-economic nature.

(127) However, the public funding of such non-economic activities does not constitute State aid, but should be strictly limited to compensating the costs to which they give rise and may not be used for other activities. Any possible overcompensation by public authorities of costs incurred in relation to non-economic activities may constitute State aid. Moreover, if an airport is engaged in non-economic activities, alongside its economic activities, separated cost accounting is required in order to avoid any transfer of public funds between the non-economic and economic activities.

(128) Moreover, public financing of non-economic activities must not lead to undue discrimination between airports. Indeed, it is established case-law that there is an advantage when public authorities relieve undertakings of the costs inherent to their economic activities (67). Civil airports which, in contrast to other civil airports, do not bear certain costs associated with their operation, could benefit from an advantage, whether or not those costs are linked to an activity considered to be of a non-economic nature.

(129) The Commission notes that the investments referred to in recitals 64 and 65 related to infrastructure or equipment necessary for firefighting, security and aviation safety. However, according to the 2014 Guidelines, those activities are intrinsically part of the essential functions of the State (68), as concluded by the Commission in previous decisions (69). In the absence of the introduction of market mechanisms for the activities referred to in recitals 64 and 65, they did not, therefore, constitute economic activities at the time the investments in question were granted. Consequently, given that the contributions paid by the public authorities under programmes 1, 2 and 3 were not formally allocated to specific costs, the Commission considers that part of the total amount of the subsidies paid under programmes 1 and 2 corresponding to the investment amounts referred to in recitals 64 and 65 related in principle to public-remit activities. The Commission would add that the costs related to the purchase of security equipment under programme 3 (70) can also come under the public-remit activity of aviation security.

(130) The Commission also considers that the investments referred to in the previous recital were all eligible for a national scheme to finance public-remit tasks (71) and could have been fully financed by that scheme if they had not been covered by the investment grants in question. The Commission has concluded in previous decisions (72) that this national financing scheme provided for by French law was based on strict cost control mechanisms, both ex ante and ex post, ensuring that the scheme would grant airport managers only the amounts strictly necessary to cover costs. Moreover, that system applied to all French civil airports, including Beauvais airport, at the time when the measures at issue were granted, in particular as regards the scope of the tasks giving rise to compensation. Finally, that system provided for separation of accounts between the commercial and public-remit activities of the airport for the purpose of declaring costs to the French Civil Aviation Authority. The non-discrimination condition is therefore met.

(131) Consequently, the grants of EUR 1 110 669 awarded under programme 1, EUR 567 782 under programme 2 and EUR 10,2 million (73) under programme 3 did not constitute State aid.

(132) On the other hand, the Commission considers that the investments referred to in recital 67 are not linked to public-remit activities.

(133) As regards, in the first place, the all-weather instrument landing system (ILS III), the Court held that ‘that instrument, even if it were mandatory and though it is indisputable that it contributes, like other systems, to the safety of landings, plays no part either in the control and supervision of airspace, [...] or in the performance of any other public policy remit which might be exercised at an airport. It contributes to the delivery of the services offered by a civil airport in a competitive context to airlines within the framework of its general activity, which is an economic activity’ (74).

(134) Secondly, with regard to the investments enabling flying clubs and private owners to be brought together in the ‘leisure’ zone to the north of the airport, the Commission considers that, although this measure helps to improve the safety of air traffic at the airport, it falls first and foremost within the commercial operation of Beauvais airport and contributes to the delivery of the services offered by a civil airport, in a competitive context, to airlines within the framework of its general activity, which is an economic activity.

(135) Finally, as regards the development of a specific area within the airport dedicated to institutional tourism development bodies, it should be noted that, according to the settled case-law of the Court, there is no cause to dissociate the activity of building or enlarging infrastructure from the subsequent use to which it is put, and that the nature of the construction activity must be determined according to whether or not the subsequent use of the infrastructure which has been built amounts to an economic activity (75). The Commission notes that in the present case, under Article 6 of the PSD agreement, while the space in question was to be made available to local public tourism bodies for the purpose of promoting local tourism, it could also be used to sell services such as ‘guided tours, hotel reservations, etc.’ and regional tourism products. The latter point was, moreover, confirmed by France itself in its observations of April 2014, without demonstrating that such activities involving the sale of services and products represented only a negligible part of the activity of local public tourism bodies. In these circumstances, the Commission considers that the 50 m2 space within the airport was intended to be used to carry out an economic activity. Therefore, the construction of that space by SAGEB was also an economic activity and its financing falls within the scope of the State aid rules.

(136) In any event, even if those investments were to be linked to public-remit activities, they were not eligible for the financing provided for by the national financing scheme for public-remit tasks, with the result that France has not demonstrated that other airports could benefit from subsidies to finance those same investments. As a result, Beauvais airport was relieved of costs which other airports could have or had to bear themselves, thereby discriminating against them.

Imputability to the State and transfer of State resources

(137) It follows from settled case-law that measures adopted by intra-state entities of the Member States, whatever their legal status and description, fall, in the same way as measures taken by the central authority, within the ambit of Article 107(1) TFEU, if the conditions laid down in that provision are satisfied (76).

(138) The investment grants in question were awarded by the Region of Picardie, the Department of Oise and the Beauvais intermunicipal authority (CCB) successively to Oise CCI and SAGEB, either directly (2002-2008) or via SMABT (2008-2023), of which these three local authorities were exclusive members (77). With regard to SMABT, the Commission also notes that this publicly owned establishment is no more than a group of local and regional authorities which has no employees of its own (the officials of the Oise department are made available to SMABT) and whose decisions (in particular budgetary ones) are taken by a joint committee composed of representatives of the three local and regional authorities that are members.

(139) Consequently, the measures granted by these entities are imputable to the State. Moreover, the resources of local authorities and SMABT (whose resources are exclusively financed from the budget of the local authorities and subject to budgetary oversight by the State – see recital 18) should be regarded as State resources within the meaning of Article 107(1) TFEU (78).

Existence of an advantage

(140) To determine whether a State measure constitutes aid to an undertaking, it must be determined whether the undertaking in question enjoys an economic advantage enabling it to avoid costs that would otherwise have been borne by its own financial resources or whether it enjoys an advantage which it would not have received under normal market conditions. That assessment is made, in principle, by the application of the market economy operator test (MEOP).

(141) Consequently, when an airport benefits from public funding, the Commission will assess whether such funding constitutes aid by considering whether in similar circumstances a private operator, having regard to the foreseeability of obtaining a return and leaving aside all social, regional-policy and sectoral considerations, would have granted the same funding.

(142) However, it follows from the case-law (79) that, as a general rule, the private investor test is applicable where the Member State has acted as an economic operator, and not as a public authority, by conferring an economic advantage on an undertaking. The private investor test should thus be applied where the conduct of the Member State could have been adopted, at least in principle, by a private operator acting with a view to profit or to limit losses (80).

(143) The Commission notes first of all that the French authorities consider that the operation of Beauvais airport as a whole should not be regarded as a service of general economic interest (SGEI) (81). It also notes that the French authorities also did not call for the MEO principle to be applied to the investment grants awarded in this case.

(144) Nonetheless, it should be borne in mind that the MEO principle is not an exception that applies only if a Member State requests it. Where it is applicable, this principle is among the factors which the Commission is required to take into account for the purposes of establishing the existence of aid. Where the Member State does not invoke the MEOP, in order to determine whether the test is applicable, it is necessary to use as a starting point the economic nature of the Member State’s action and not how that Member State, subjectively speaking, intended to act or which alternative courses of action it considered before adopting the measure in question (82).

(145) As stated in recital 17, the State was the owner of Beauvais airport until 1 March 2008, while Oise CCI was responsible for managing and running it under a temporary authorisation to occupy the public domain, followed by a public equipment concession.

Programme 1

(146) With regard to programme 1, the Commission considers that the local authorities which granted the subsidies provided for under programme 1 to Oise CCI did not act in their capacity as economic operators.

(147) Indeed, the Commission considers that the Region of Picardie, the Department of Oise and the Beauvaisis intermunicipal authority (CCB) could not expect, under programme 1 and at the time when the investment grants were awarded (83), to obtain any financial return on their contribution to the investments made in Beauvais airport by Oise CCI.

(148) The three local authorities referred to above were not shareholders in Oise CCI and had no title of ownership in the airport at the time the aid was granted. Moreover, the financing agreements concluded by each authority with Oise CCI (84) did not contain any optional or compulsory profit-sharing schemes in return for the subsidies awarded.

(149) In addition, these subsidies were awarded with the sole aim of supporting the development of the regional economy and enhancing environmental protection and the safety of local residents (85). However, public interest considerations cannot be taken into account when applying the market economy operator test (86).

(150) It cannot therefore be concluded that the conduct of the authorities referred to above could have been adopted, at least in principle, by a private operator acting with the aim of making a profit. The MEO criterion is therefore not applicable in the present case with regard to the subsidies granted under programme 1.

(151) Given that, at the time the subsidies were granted, Oise CCI was responsible under the 1997 AOT for developing the infrastructure and equipment of Beauvais airport (87), it was therefore required to bear the cost of the investments referred to in recital 37, with the exception of investments falling within the scope of public-remit tasks (88). The investment grants it received under programme 1 thus enabled it to avoid having to bear costs that would normally have had to be met out of its own financial resources. Consequently, these subsidies conferred an economic advantage on Oise CCI.

Programme 2

(152) The considerations set out in the context of programme 1 also apply to the subsidies awarded under programme 2. Indeed, the Commission considers that the local authorities which awarded the grants to Oise CCI provided for under programme 2 did not act in their capacity as economic operators.

(153) However, the Commission notes that, while the financing agreement between Oise CCI and the Department of Oise was concluded on 18 December 2006 (i.e. before the date on which ownership of the airport was transferred to SMABT), the financing agreements with the Region of Picardie and the CCB were concluded after 1 March 2007, i.e. after the date on which the agreement granting ownership of Beauvais airport to SMABT with effect from 1 March 2008 was signed (89). Nonetheless, the Commission considers that the MEO principle should not be applied to the subsidies paid under programme 2 for the following reasons.

(154) First of all, each of the local authorities concluded the financing agreements with Oise CCI on an individual basis and not on behalf of or in the name of SMABT. Yet only SMABT, i.e. the entity comprising those three authorities and not each authority individually, could expect a financial return on the investments financed. In this sense, SMABT’s articles of association do not provide for any form of redistribution of profits made in the course of its activities to its member authorities. Moreover, none of the financing agreements contained an optional or compulsory profit-sharing scheme in return for the subsidies awarded.

(155) In addition, these subsidies were awarded with the sole aim of supporting the development of the regional economy and enhancing environmental protection and the safety of local residents (90). However, public interest considerations cannot be taken into account when applying the market economy operator test.

(156) It cannot therefore be concluded that the conduct of the authorities referred to above could have been adopted, at least in principle, by a private operator acting with the aim of making a profit. The MEO criterion is therefore not applicable in the present case with regard to the subsidies granted under programme 2.

(157) Given that, at the time the grants were awarded, Oise CCI was responsible under the 2002 public equipment concession for developing the infrastructure and equipment of Beauvais airport (91), it was therefore required to bear the cost of the investments referred to in recital 39, with the exception of investments falling within the scope of public-remit tasks (92). The investment grants it received under programme 2 thus enabled it to avoid having to bear costs that would normally have had to be met out of its own financial resources. Consequently, these subsidies conferred an economic advantage on Oise CCI.

Programme 3

(158) As regards the investment grants paid by SMABT to SAGEB under the PSD agreement, the Commission notes that those grants were provided for in the agreement in order to support the implementation of the investment programme imposed on SAGEB at its own expense. In the context of that agreement, SMABT, as the contracting authority, was paid a fixed land lease fee of EUR 10 795 243 for the entire duration of the PSD agreement (93) as well as a share of the profits from its investments (94). The entitlement to a share of profit was triggered under certain conditions (95) and its amount was set at 50 % of excess profit (96).

(159) The Commission further notes that these conditions were established following an invitation to tender for the concession to operate Beauvais airport and the route linking the airport to Paris, under the terms of which the applicants were required to include an investment plan in their tender. The call for tenders consisted of a negotiated procedure with publication. After five applications and four tenders had been submitted, SMABT decided to select two tenders and to start negotiations with two consortia: Oise CCI-Veolia, and the consortium comprising Vinci, Airports-Vinci, SA Keolis and Group K Finance. After inviting the two consortia to submit final tenders, primarily on the basis of a benchmark scenario providing for controlled growth of air traffic limited to 21 000 movements by 2022, SMABT eventually awarded the concession contract to the Oise CCI-Veolia consortium.

(160) In the first place, the Commission considers there to be little doubt that the MEO principle was applicable to the investment grants paid by SMABT to SAGEB under the PSD agreement.

(161) As the owner of Beauvais airport, SMABT decided to pay these grants under the PSD agreement, providing for delegation of the management of the airport to SAGEB, with financial compensation for SMABT. In other words, the public authority, as the infrastructure owner, decided to outsource its management to a third party operator in return for a financial consideration. This approach could be adopted, at least in principle, by a private operator acting with the aim of making a profit or leveraging the value of an asset it owns by outsourcing its management to a third party.

(162) In addition, the decision delegating the concession for the management of Beauvais airport was taken with a view to entrusting the concession holder with the tasks of maintaining and operating Beauvais airport, operating the bus route between Paris and Beauvais airport and conducting an investment programme aimed at developing the airport’s commercial infrastructure (recital 19). The overall purpose of these tasks was therefore primarily commercial. The same is true of the objectives pursued by SMABT, one of which was to increase commercial traffic up to the maximum capacity permitted by law (see recital 167).

(163) It follows that the existence of a potential selective advantage granted under programme 3 must be analysed in accordance with the MEO principle.

(164) As indicated in recital 159, the grants under programme 3 were part of a contractual package for which SMABT organised a tender procedure. Therefore, in order to verify whether those grants conferred an advantage on SAGEB which it would not have obtained under normal market conditions, the Commission must analyse whether the tender procedure, which provided for the payment of grants where necessary, was conducted in accordance with the MEO principle.

(165) It should be borne in mind that, where the acquisition of services through the exercise of public authority is concerned, this must in principle be done in compliance with the public procurement rules laid down by secondary EU law. In that case, the fact that such a tender procedure is conducted before a public authority of a Member State makes a purchase of services is normally considered sufficient to rule out the possibility that the Member State is seeking to grant an advantage to the chosen service provider that it would not have otherwise obtained under normal market conditions (97). This is the case, in principle, where a concession for the commercial operation of an airport is granted following a competitive, transparent, non-discriminatory and unconditional tender procedure, in line with the principles of the TFEU on public procurement, provided that the appropriate criteria for selecting the buyer or seller (98) that would have been applied by a private operator in the same circumstances as SMABT have been used.

(166) Above all, a tender must be competitive to allow all interested and qualified tenderers to participate in the process. The procedure must also be transparent to allow all interested candidates to be equally and duly informed at each stage of the tender procedure. Thirdly, non-discriminatory treatment of all tenderers at all stages of the procedure and objective selection and award criteria specified in advance of the process are indispensable conditions for ensuring that the resulting transaction is in line with market conditions.

(167) The information provided by France shows that the tender procedure was published in official publications for legal announcements, such as the Official Journal of the European Union, and in a specialised journal. Article 3.3 of the tendering rules (99) specified that the objectives of SMABT were to: — increase traffic up to 21 000 commercial movements per year, the maximum set by the noise exposure plan, by 2012; — develop the economic benefits in terms of direct and indirect employment linked to the operation of the platform, as well as in terms of tourism and business parks; — integrate the management of the airport into an environmental plan, which is currently being devised.

(168) Article 7 of the tendering rules also specified that the tenders of candidates participating in the invitation to tender for the public service delegation for the operation of the Beauvais airport hub would be evaluated on the basis of the following criteria: — the nature and quality of the means implemented to organise and operate the airport (management, human resources, operation of the bus service, sustainable development requirements); — the overall organisation involved in operating the airport and the financial relations between SMABT and the successful tenderer; and — the quality of the investment programme.

(169) The Commission notes that the candidates had equal access to various pieces of information and documents comprising, in particular, the draft contract and its detailed annexes, the financial information relating to Oise CCI’s accounts under the concession agreement concluded with the State in 2002 (100), the list of assets made available to the successful tenderer, the existing depreciation tables indicating their status, the airport services contracts in force, the consolidated version of the contract concluded between SMABT and Oise CCI relating to the operation of the bus route and the economic and financial data pertaining to it, as well as the list of staff assigned to the operation of the airport and various extracts from the regulations applicable to the airport (noise exposure plan, environmental assessment, police order, operating regulations, etc.). The company consultation file was submitted in electronic form (CD-Rom) and candidates could ask questions by e-mail before the deadline for the submission of tenders. A data room was also made available to each candidate to physically consult the files on the SMABT premises and an on-site visit to the airport facilities was organised for each candidate.

(170) The Commission notes that these elements were confirmed by national administrative courts, before which two of the unsuccessful candidates brought two pre-contractual applications for interim relief and which also found that the procedure in question had complied with the reasonable time limits for the submission of applications and tenders (101). More broadly, those courts concluded that the procedure had taken place in a way that complied with the principles of equal treatment in public procurement and transparency. Finally, the Commission notes that the procedure enabled a relatively large number of candidates (five) to submit tenders having knowledge of the selection criteria and the objectives pursued by SMABT.

(171) The procedure in question was therefore conducted on a competitive, transparent and non-discriminatory basis.

(172) However, the Commission reiterates that, as regards the criterion relating to the unconditional nature of the invitation to tender, when public bodies buy assets, goods and services, any specific conditions attached to the tender should be non-discriminatory and closely and objectively related to the subject matter and to the specific economic objective of the contract. They should allow for the most economically advantageous offer to match the value of the market. The criteria therefore should be defined in such a way as to allow for an effectively competitive tendering procedure which leaves the successful bidder with a normal return, not more. In practice, this implies the use of tenders which p