CELEX: E2005C0329
Language: en
Date: 2005-12-20 00:00:00
Title: EFTA Surveillance Authority Decision No 329/05/COL of 20 December 2005 amending for the 54th time the procedural and substantive rules in the field of State Aid including proposal for appropriate measures

6.3.2008   
            
            
               EN
            
            
               Official Journal of the European Union
            
            
               L 62/30
            
         EFTA SURVEILLANCE AUTHORITY DECISION
   
   No 329/05/COL
   of 20 December 2005
   amending for the 54th time the procedural and substantive rules in the field of State Aid including proposal for appropriate measures
   THE EFTA SURVEILLANCE AUTHORITY,
   HAVING REGARD TO the Agreement on the European Economic Area (1), in particular to Articles 61 to 63 and Protocol 26 thereof,
   HAVING REGARD TO the Agreement between the EFTA States on the establishment of a Surveillance Authority and a Court of Justice (2), in particular to Article 24, Article 5(2)(b) and Article 1 in Part I of Protocol 3 and Articles 18 and 19 in Part II of Protocol 3 thereof,
   WHEREAS under Article 24 of the Surveillance and Court Agreement, the EFTA Surveillance Authority shall give effect to the provisions of the EEA Agreement concerning State aid,
   WHEREAS under Article 5(2)(b) of the Surveillance and Court Agreement the EFTA Surveillance Authority shall issue notices or guidelines on matters dealt with in the EEA Agreement, if that Agreement or the Surveillance and Court Agreement expressly so provides or if the EFTA Surveillance Authority considers it necessary,
   RECALLING the Procedural and Substantive Rules in the Field of State Aid (3) adopted on 19 January 1994 by the EFTA Surveillance Authority (4),
   WHEREAS, on 6 September 2005, the European Commission adopted a new Communication setting out the principles for the application of the State aid rules on financing of airports and start-up aid to airlines departing from regional airports (5),
   WHEREAS this Communication is also of relevance for the European Economic Area,
   WHEREAS a uniform application of the EEA State aid rules is to be ensured throughout the European Economic Area,
   WHEREAS, according to point II under the heading ‘GENERAL’ at the end of Annex XV to the EEA Agreement, the EFTA Surveillance Authority is to adopt, after consultation with the Commission, acts corresponding to those adopted by the European Commission,
   HAVING consulted the European Commission,
   RECALLING that the EFTA Surveillance Authority has consulted the EFTA States by letters dated 7 November 2005 on the subject,
   HAS ADOPTED THIS DECISION:
   
               1.
            
            
               The State Aid Guidelines shall be amended by introducing a new Chapter 30A, financing of airports and start up aid to airlines departing from regional airports. The new chapter is contained in Annex I to this Decision. Appropriate measures, contained in Annex I to this Decision, are proposed.
            
         
               2.
            
            
               The EFTA States shall be informed by means of a letter, including a copy of this Decision and including the Annex thereto. The EFTA States are requested to signify their agreement to the proposal for appropriate measures within 1 June 2006.
            
         
               3.
            
            
               The European Commission shall be informed, in accordance with point (d) of Protocol 27 of the EEA Agreement, by means of a copy of this Decision, including the Annex.
            
         
               4.
            
            
               The Decision, including Annex I, shall be published in the EEA Section of and in the EEA Supplement to the Official Journal of the European Union.
            
         
               5.
            
            
               In case the EFTA States accept the proposal for appropriate measures, a summary notice shall be published in the EEA Section of and in the EEA Supplement to the Official Journal of the European Union (attached in Annex II to this Decision).
            
         
               6.
            
            
               The Decision is authentic in the English language.
            
         
      Done at Brussels, 20 December 2005.
      
         
            For the EFTA Surveillance Authority
         
         Einar M. BULL
         
         
            President
         
         Kurt JÄGER
         
         
            College Member
         
      
   
   
      (1)  Hereinafter referred to as the EEA Agreement.
   
      (2)  Hereinafter referred to as the Surveillance and Court Agreement.
   
      (3)  Hereinafter referred to as the State Aid Guidelines.
   
      (4)  Initially published in OJ L 231, 3.9.1994, and in the EEA Supplement thereto No 32 on the same date. An updated version of the State Aid Guidelines is available on the Authority’s website: www.eftasurv.int
   
      (5)  Community guidelines on financing of airports and start-up aid to airlines departing from regional airports (OJ C 312, 9.12.2005, p. 1).
   
      ANNEX
      
         ‘30A.   FINANCING OF AIRPORTS AND START UP AID TO AIRLINES DEPARTING FROM REGIONAL AIRPORTS
         30A.1.   Introduction
         30A.1.1.   General context
         
                     (1)
                  
                  
                     The Commission of the European Communities (hereinafter the “European Commission” or the “Commission”) has issued a communication on financing of airports and start up aid to airlines departing from regional airports which form part of the general plan to create a single European airspace. The set of liberalisation measures known as the “third air package”, in force in the European Union since 1993 and the EEA since 1994, has enabled all air carriers holding an EEA licence to have unrestricted access within the area covered by the EEA Agreement, with freedom of tariffs, since April 1997 (1). As a corollary, to guarantee citizens continuous quality service at affordable prices throughout their territory, those EEA States that wish to do so have established public service obligations relating to frequency, service punctuality, availability of seats or preferential rates for certain categories of users within a clear legal framework. These public service obligations have enabled air transport to make a significant contribution to economic and social cohesion and to balanced development in the regions.
                  
               
                     (2)
                  
                  
                     In addition, a number of measures have been taken in areas such as allocation of slots (2), ground handling services (3) and computerised reservation systems (4), in order to underpin this market liberalisation and allow businesses to compete on a level playing field.
                  
               
                     (3)
                  
                  
                     The EFTA Surveillance Authority (“hereinafter the Authority”) considers the European Commission guidelines to be EEA relevant and hereby adopts corresponding guidelines under the power conferred upon it by Article 5(2)(b) in the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice (hereinafter the “Surveillance and Court Agreement”) (5).
                  
               
                     (4)
                  
                  
                     The Authority considers that airports can have an impact on the success of local economies and on maintaining local services such as education and health. Passenger and freight services can be crucial for competitiveness and development in some regions. Airports that provide good services can act as a magnet for airlines and thus promote business activity as well as economic, social and regional cohesion within the area covered by the EEA Agreement.
                  
               
                     (5)
                  
                  
                     Further, the Authority welcomes the development and appreciates the contribution made by low cost airlines on the general reduction in the price of air travel in Europe, the wider range of services available, and the accessibility of air travel to a wider public. However, the Authority must nevertheless ensure that the EEA Agreement is complied with, in particular the competition rules, especially those concerning State aid.
                  
               30A.1.1.1.   Types of airport
         
                     (6)
                  
                  
                     In the airport industry there are currently several different levels of competition between the different types of airport. This is a key factor when investigating State aid, and makes it necessary to examine the extent to which competition could be distorted and the functioning of the EEA Agreement affected. Competition scenarios are evaluated case by case, based on the markets in question. However, research (6) has shown that, generally, major international hubs are competing with similar airports in all the transport markets concerned, with the level of competition depending on factors such as congestion and the existence of alternative transport, or, in certain cases (see below), with large regional airports. Large regional airports may be competing not only with other large regional airports but also with the major EEA hubs and land transport, especially if there is high-quality land access to the airport. This research has also shown that small airports do not generally compete with other airports except, in some cases, with neighbouring airports of a similar size whose markets overlap.
                  
               
                     (7)
                  
                  
                     For the purpose of these guidelines, the Authority has defined the following four categories of airports;
                     
                                 —
                              
                              
                                 category A, hereinafter “large EEA airports”, with more than 10 million passengers a year,
                              
                           
                                 —
                              
                              
                                 category B comprises “national airports”, with an annual passenger volume of between 5 and 10 million,
                              
                           
                                 —
                              
                              
                                 category C comprises “large regional airports”, with an annual passenger volume of between 1 and 5 million,
                              
                           
                                 —
                              
                              
                                 category D, hereinafter “small regional airports”, with an annual passenger volume of less than 1 million.
                              
                           
               30A.2.   Objectives of these guidelines and changes compared with the 1994 guidelines
         
                     (8)
                  
                  
                     Chapter 30 of the EFTA Surveillance Authority's State Aid Guidelines refers to the European Commission's 1994 guidelines on the application of Articles 92 (now 87) and 93 (now 88) of the EC Treaty and Article 61 of the EEA Agreement on State aid to the aviation secto (7) (hereinafter the aviation sector guidelines). The aviation sector guidelines do not cover all the new aspects relating to the financing of airports and start-up aid for new routes.
                  
               
                     (9)
                  
                  
                     The Commission guidelines of 1994 relate almost exclusively to the conditions for granting State aid to airlines, by limiting direct operating aid to airlines solely to public service obligations and aid of a social nature. Part II.3 of the Commission guidelines of 1994 relates to public investment in airport infrastructure. It states that “the construction of (airport) infrastructure projects represents a general measure of economic policy which cannot be controlled by the Commission under the Treaty rules on State aid. This general principle applies only to the construction of infrastructures by Member States, and does not apply to aid resulting from preferential treatment of certain companies for the use of the infrastructures.”
                     The current guidelines therefore add to, rather than replace, those from 1994 by specifying how the competition rules must be applied to the various means of financing airports (see Section 30A.4), and start-up aid for airlines leaving from regional airports (see Section 30A.5).
                  
               
                     (10)
                  
                  
                     To this end, the Authority takes account of the contribution that developing regional airports makes. Thus:
                     
                                 —
                              
                              
                                 increased use of regional airports is an asset in combating air traffic congestion at the major European hubs. In its White Paper “European transport policy for 2010: Time to decide” (8), the Commission explains that “there is already a specific action plan on congestion of the sky, but congestion on the ground is not yet receiving the necessary attention or commitment. However, almost half of Europe's 50 largest airports have already reached or are close to reaching saturation point in terms of ground capacity.”,
                              
                           
                                 —
                              
                              
                                 more access points for intra-European flights increase the mobility of European citizens,
                              
                           
                                 —
                              
                              
                                 developing these airports also helps develop the regional economies concerned.
                              
                           However, regional airports often face a less favourable situation when developing their services than the major European hubs such as London, Paris or Frankfurt. They do not have a large reference airline that focuses its operations on that airport in order to offer passengers as many connections as possible and to take advantage of the significant economies of scale that such a structure allows. They may not have reached the critical size needed to be sufficiently attractive. In addition, regional airports often have to overcome a poor image and low profile due to their location in areas affected by economic difficulties.
                  
               
                     (11)
                  
                  
                     This is why in these guidelines the Authority has taken a positive approach to developing regional airports, while at the same time ensuring strict compliance with the principles of transparency, non-discrimination and proportionality so as to prevent any distortion of competition which would not be in the common interest in terms of public funding to regional airports and State aid to airlines.
                  
               
                     (12)
                  
                  
                     This approach must also fit in with the general aims of transport policy, in particular intermodality with railways. In recent years a significant contribution has been made, in terms of both policy and financing, to the pursuit of ambitious programmes to develop a high-speed rail network. High-speed rail offers a highly attractive alternative to air travel in terms of time, price, comfort and sustainable development. Notwithstanding the work that remains to be done to extend the high-speed rail network to the whole area covered by the EEA Agreement, it should therefore seek to benefit from the capacity of high-speed rail travel to provide efficient, high-quality connections, and encourage rail and air operators to cooperate in accordance with Article 53 of the EEA Agreement in order to develop complementarily between the two modes in the interest of users.
                  
               
                     (13)
                  
                  
                     Insofar as these guidelines take a stand on issues such as the absence or presence of aid, they set out, for information purposes, the Authority's general interpretation of these issues at the time of drafting. This is purely indicative, and without prejudice to the interpretation of this concept by the EFTA Court or the Community Courts.
                  
               30A.3.   Scope and common compatibility rules
         30A.3.1.   Scope and legal basis
         
                     (14)
                  
                  
                     This framework specifies to what extent and how public financing of airports and State aid for starting up air routes will be assessed by the Authority in the light of the rules and procedures on State aid. The Authority will base its assessment on Article 59(2) or Article 61(3)(a), (b) or (c) of the EEA Agreement.
                  
               
                     (15)
                  
                  
                     Article 59(2) of the EEA Agreement allows EFTA States to derogate from the rules on State aid in respect of undertakings entrusted with the operation of services of general economic interest if the application of such rules obstructs the performance, in law or in fact, of the particular tasks assigned to them and provided the development of trade is not affected to such an extent as would be contrary to the interests of the Contracting Parties.
                  
               
                     (16)
                  
                  
                     Article 61(3) of the EEA Agreement lists the aid that may be declared compatible with the functioning of the EEA Agreement. Article 61(3)(a) and (c) provide for derogations for aid granted to promote or facilitate the development of certain areas and/or certain economic activities.
                  
               
                     (17)
                  
                  
                     In Chapter 25 of the State Aid Guidelines on national regional aid (hereinafter the guidelines on national regional aid), the Authority has indicated the conditions under which regional aid can be considered compatible with the functioning of the EEA Agreement in accordance with Article 61(3)(a) and (c). Operating aid (9) granted to airports or airlines (such as start-up aid) can only be declared compatible under exceptional circumstances and under strict conditions in underprivileged regions, i.e. regions covered by the derogation set out in Article 61(3)(a) of the EEA Agreement, and for sparsely populated areas (10).
                  
               
                     (18)
                  
                  
                     In accordance with Article 61(3)(b), aid to promote the execution of an important project of common European interest may be considered to be compatible with the functioning of the EEA Agreement. Particular reference is made to projects relating to trans-European networks, which may include airport projects.
                  
               
                     (19)
                  
                  
                     When the above provisions are not applicable, the Authority will evaluate the compatibility of the aid given to airports and start-up aid under Article 61(3)(c) of the EEA Agreement. The following provisions set out the principles the Authority will follow in carrying out its assessment.
                  
               30A.3.2.   Existence of State aid
         30A.3.2.1.   Airports' economic activity
         
                     (20)
                  
                  
                     The EEA Agreement adopts a neutral stance on the question of whether a State opts for public or private ownership of airports. As regards the existence of State aid, the essential point is whether the beneficiary is engaged in an economic activity (11). There can be no doubt that airlines are engaged in an economic activity. Likewise, once an airport engages in economic activities, regardless of its legal status or the way in which it is financed, it constitutes an undertaking within the meaning of Article 61(1) of the EEA Agreement, and the rules on State aid therefore apply (12).
                  
               
                     (21)
                  
                  
                     In the “Aéroports de Paris” case (13), the European Court of Justice (hereinafter the Court of Justice) ruled that airport management and operation activities consisting in the provision of airport services to airlines and to the various service providers within airports are economic activities because they consist in the provision of airport facilities to airlines and the various service providers, in return for a fee at a rate freely fixed by the manager, and do not fall within the exercise of its official powers as a public authority and are separable from its activities in the exercise of such powers. Thus, the airport operator, in principle, is engaged in an economic activity within the meaning of Article 61(1) of the EEA Agreement, to which the rules on State aid apply.
                  
               
                     (22)
                  
                  
                     However, not all the activities of an airport operator are necessarily of an economic nature. It is necessary to distinguish between its activities and to establish to what extent its activities are of an economic nature (14).
                  
               
                     (23)
                  
                  
                     The Court of Justice has held that activities that normally fall under State responsibility in the exercise of its official powers as a public authority are not of an economic nature and do not fall within the scope of the rules on State aid. Such activities include safety, air traffic control, police, customs, etc. Generally speaking, the financing of these activities must be strictly limited to compensation of the costs to which they give rise and may not be used instead to fund other economic activities (15). As explained by the European Commission in its Communication of 10 October 2001 following the attacks of 11 September 2001, “It goes without saying that, if certain measures are imposed directly on airlines and other operators in the sector such as airports, suppliers of ground handling services and providers of air navigation services, the financing of such measures by the public authorities must not give rise to operating aid incompatible with the Treaty.”
                  
               30A.3.2.2.   Airport activities constituting services of general economic interest
         
                     (24)
                  
                  
                     Certain economic activities carried out by airports can be considered by the public authority as constituting a service of general economic interest. In this case, the authority imposes on the airport operator certain public service obligations in order to ensure that the general public interest is appropriately served. In such circumstances, the airport operator may be compensated by the public authorities for the additional costs deriving from the public service obligation. It is not impossible for the overall management of an airport, in exceptional cases, to be considered a service of general economic interest. In this case, the public authority might impose public service obligations on an airport — for example, an airport located in an isolated region — and might decide to pay compensation for these obligations. However, it should be noted that the overall management of an airport as a service of general economic interest should not cover activities which are not directly linked to its basic activities and listed in paragraph 43(iv).
                  
               
                     (25)
                  
                  
                     In this connection, the Authority draws attention to the judgment by the Court of Justice in the Altmark case (16), which established case law in this regard. The Court of Justice ruled that compensation for public service does not constitute State aid within the meaning of Article 87 of the EC Treaty provided that the following four criteria are met:
                     
                                 1.
                              
                              
                                 the recipient undertaking must actually have public service obligations to discharge and the obligations must be clearly defined;
                              
                           
                                 2.
                              
                              
                                 the parameters on the basis of which the compensation is calculated must be established in advance in an objective and transparent manner;
                              
                           
                                 3.
                              
                              
                                 the compensation cannot exceed what is necessary to cover all or part of the costs incurred in the discharge of public service obligations, taking into account the relevant receipts and a reasonable profit for discharging those obligations; and
                              
                           
                                 4.
                              
                              
                                 where the undertaking which is to discharge public service obligations, in a specific case, is not chosen pursuant to a public procurement procedure which would allow for the selection of the tendered capable of providing those services at the least cost to the community, the level of compensation needed must be determined on the basis of an analysis of the costs which a typical undertaking, well run and adequately provided with means of transport so as to be able to meet the necessary public service requirements, would have incurred in discharging those obligations, taking into account the relevant revenues and a reasonable profit for discharging the obligations.
                              
                           
               
                     (26)
                  
                  
                     When it complies with the conditions established by the Altmark judgment, compensation for public service obligations imposed on an airport operator do not constitute State aid.
                  
               
                     (27)
                  
                  
                     Public financing of airports other than those referred to above may constitute State aid within the meaning of Article 61(1) of the EEA Agreement if it affects competition and trade between Contracting Parties to the EEA Agreement.
                  
               30A.3.2.3.   Effects of financing given to airports on competition and trade between Contracting Parties to the EEA Agreement
         
                     (28)
                  
                  
                     Competition between airports can be assessed in the light of airlines' criteria of choice, and in particular by comparing factors such as the type of airport services provided and the clients concerned, population or economic activity, congestion, whether there is access by land, and also the level of charges for use of the airport infrastructure and services. The charge level is a key factor, since public funding granted to an airport could be used to maintain airport charges at an artificially low level in order to attract traffic and may significantly distort competition.
                  
               
                     (29)
                  
                  
                     However, on the basis of these guidelines, the Authority considers that the categories identified in point 7 can provide an indication of the extent to which airports are competing with one another and therefore also the extent to which public funding granted to an airport may distort competition.
                     Thus, public financing granted to national and EEA airports (categories A and B) will normally be considered to distort or threaten to distort competition and to affect trade between the Contracting Parties to the EEA Agreement. Conversely, funding granted to small regional airports (category D) is unlikely to distort competition or affect trade to an extent contrary to the common interest.
                  
               
                     (30)
                  
                  
                     However, beyond these general indications, it is not possible to establish rules covering every possible case, particularly for airports in categories C and D.
                     For this reason any measure which may constitute State aid to an airport must be notified so that its impact on competition and trade between Contracting Parties to the EEA Agreement can be examined, and, where appropriate, its compatibility with the functioning of the EEA Agreement.
                  
               
                     (31)
                  
                  
                     The Commission Decision of 13 July 2005 on the application of Article 86 of the EC Treaty on State aid in the form of public service compensation applies when airports in category D are entrusted with a mission of general economic interest. Public service compensation constituting State aid is however exempted from the prior notification requirement, as long as the compensation complies with certain conditions laid down in the Decision (17). The Commission Decision has not yet been incorporated into the EEA Agreement.
                  
               30A.3.2.4.   The principle of private investor in a market economy
         
                     (32)
                  
                  
                     Article 125 of the EEA Agreement States that the Agreement in no way prejudices the rules of the Contracting Parties governing the system of property ownership. Contracting Parties can accordingly own and manage undertakings, and can purchase shares or other interests in public or private undertakings.
                  
               
                     (33)
                  
                  
                     This principle means that the Authority's action cannot penalise or give more favourable treatment to public authorities which subscribe to the capital of certain companies. Similarly, it is not for the Authority to make any judgment on the choices made by undertakings between different types of financing.
                  
               
                     (34)
                  
                  
                     Consequently, these guidelines make no distinction between the different types of beneficiaries in terms of their legal structure or whether they belong to the public or private sector, and all references to airports or the companies which manage them include all types of legal entity.
                  
               
                     (35)
                  
                  
                     Moreover, these principles of non-discrimination and equality do not exempt public authorities or public companies from applying competition rules.
                  
               
                     (36)
                  
                  
                     In general, whether the public funding benefits airports or is granted directly or indirectly by the public authorities to airlines, the Authority will assess whether it constitutes aid by considering whether “in similar circumstances a private shareholder, having regard to the foreseeability of obtaining a return and leaving aside all social, regional-policy and sectoral considerations, would have subscribed to the capital in question” (18).
                  
               
                     (37)
                  
                  
                     The Court of Justice has ruled that “the principle of equality, to which the governments refer in connection with the relationship between public and private undertakings, in general, presupposes that the two are in comparable situations. […] private undertakings determine their industrial and commercial strategy by taking into account in particular requirements of profitability. Decisions of public undertakings, on the other hand, may be affected by factors of a different kind within the framework of the pursuit of objectives of public interest by public authorities which may exercise an influence over those decisions.” (19). Thus the concept of foreseeable profitability for the operator who effectively provides the funds as a market player is of central importance.
                  
               
                     (38)
                  
                  
                     The Community Courts have also ruled that the conduct of a public investor must be compared with that of a private investor pursuing a structural policy — whether general or sectoral — and guided by prospects of profitability in the longer term (20). These considerations are particularly pertinent to investment in infrastructure.
                  
               
                     (39)
                  
                  
                     All State resources used by EFTA States or public authorities to benefit airport operators or airlines must therefore be assessed with regard to these principles. In cases where EFTA States or public authorities act as private economic operators would, these advantages will not constitute State aid.
                  
               
                     (40)
                  
                  
                     If, on the other hand, public resources are made available to a company under more favourable conditions (i.e., in economic terms, at a lower cost) than would be provided by a private economic operator to a company in a comparable financial situation and facing similar competition, that company is receiving assistance which constitutes State aid.
                  
               
                     (41)
                  
                  
                     In terms of start-up aid, it is possible that a public airport gives an airline financial advantages from its own resources generated by its business activity, which would not constitute State aid if it proves to be acting as a private investor, for example by providing a business plan setting out the profitability forecasts for its airport economic activity. Conversely, if a private airport gives funding which in fact is no more than a redistribution of public resources given to it for this purpose by a public body, these subsidies must be considered as State aid if the decision to redistribute public resources is taken by the public authorities.
                  
               
                     (42)
                  
                  
                     Applying the principle of the private investor, and therefore that there is no aid, presupposes the reliability of the whole economic model of the operator acting as an investor: an airport which does not finance its investments or does not pay the corresponding fees, or whose operating costs are partly covered by public funds, over and above a task undertaken in the general interest, cannot usually be considered as a private operator in a market economy, subject to a case-by-case assessment; it is therefore extremely difficult to apply this reasoning to such an operator.
                  
               30A.4.   Financing airports
         
                     (43)
                  
                  
                     Airport activities can be categorised as follows:
                     
                                 (i)
                              
                              
                                 construction of airport infrastructure and equipment (runways, terminals, aprons, control tower) or facilities that directly support them (fire-fighting facilities, security or safety equipment);
                              
                           
                                 (ii)
                              
                              
                                 operation of the infrastructure, comprising the maintenance and management of airport infrastructure;
                              
                           
                                 (iii)
                              
                              
                                 provision of airport services ancillary to air transport, such as ground handling services and the use of related infrastructure, fire-fighting services, emergency services, security services, etc; and
                              
                           
                                 (iv)
                              
                              
                                 pursuit of commercial activities not directly linked to the airport's core activities, including the construction, financing, use and renting of land and buildings, not only for offices and storage but also for the hotels and industrial enterprises located within the airport, as well as shops, restaurants and car parks. As these are not transport activities, public financing of them is not covered by these guidelines and will be assessed on the basis of the relevant sectoral and general rules.
                              
                           
               
                     (44)
                  
                  
                     These guidelines apply to all airport activities, with the exception of safety, air traffic control and any other activities for which an EFTA State is responsible as part of its official powers as a public authority (21).
                  
               30A.4.1.   Financing of airport infrastructure
         
                     (45)
                  
                  
                     This section concerns aid for the construction of airport infrastructure and equipment or facilities that directly support them as defined in paragraphs 43(i) and 44 above.
                  
               
                     (46)
                  
                  
                     Infrastructure is the basis for the economic activities carried out by the airport operator. However, it also represents one of the ways in which the State can affect regional economic development, land-use planning policy, transport policy, etc.
                  
               
                     (47)
                  
                  
                     Any airport operator engaging in an economic activity within the meaning of the judgment referred to in paragraph 21 should finance the costs of using or building the infrastructure it manages from its own resources. Consequently, the provision of airport infrastructure to an operator by an EFTA State (including regional or local authorities) not acting as a private investor without adequate financial consideration or the granting to an airport operator of public subsidies intended to finance infrastructure can give that airport operator an economic advantage over its competitors and must therefore be notified and examined in the light of the rules on State aid.
                  
               
                     (48)
                  
                  
                     The European Commission and the Authority have already had occasion to spell out the conditions under which operations such as the sale of land or buildings (22) or the privatisation of an undertaking (23) does not, in its opinion, involve the possibility of State aid. This is generally the case if these operations are made at market prices, in particular where the price is the outcome of a sufficiently well-publicised, open, unconditional and non-discriminatory bidding procedure which ensures that potential applicants are treated equally. Without prejudice to the obligations deriving from the rules and principles applicable to public procurement and concessions, when these are applicable, the same kind of reasoning applies in principle, mutatis mutandis, to the sale or provision of infrastructure by public authorities.
                  
               
                     (49)
                  
                  
                     In any case, it is not possible to rule out the possibility that particular cases may contain elements of aid. For example, there might be aid if the infrastructure in question were allotted to a predetermined manager which gained undue advantage therefrom, or if an unjustifiable difference between the sale price and a recent construction price were to give the purchaser an undue advantage.
                  
               
                     (50)
                  
                  
                     In particular, when additional infrastructure, which was not planned when the existing infrastructure was allotted, is made available to the airport operator, the operator must pay rent at market values commensurate with the costs of the new infrastructure and the duration of its use. Moreover, if further development of the infrastructure was not provided for in the original contract, the additional infrastructure must be closely linked to use of the existing infrastructure and the subject of the manager's initial contract must stay the same.
                  
               
                     (51)
                  
                  
                     If it is not possible to rule out the possibility of State aid, the measure in question must be notified. If it is confirmed that the measure involves aid, such aid may be declared compatible, in particular pursuant to Articles 61(3)(a), (b) or (c) or 59(2) of the EEA Agreement and, where applicable, their implementing provisions. To that end, the Authority will in particular examine whether:
                     
                                 —
                              
                              
                                 construction and operation of the infrastructure meets a clearly defined objective of general interest (regional development, accessibility, etc.),
                              
                           
                                 —
                              
                              
                                 the infrastructure is necessary and proportional to the objective which has been set,
                              
                           
                                 —
                              
                              
                                 the infrastructure has satisfactory medium-term prospects for use, in particular as regards the use of existing infrastructure,
                              
                           
                                 —
                              
                              
                                 all potential users of the infrastructure have access to it in an equal and non-discriminatory manner,
                              
                           
                                 —
                              
                              
                                 the development of trade is not affected to an extent contrary to the functioning of the EEA Agreement.
                              
                           
               30A.4.2.   Aid for operation of airport infrastructure
         
                     (52)
                  
                  
                     In principle, the Authority considers that an airport operator, like any other business, should meet the normal costs of running and maintaining the airport infrastructure from its own resources. Any public financing of these services would reduce the expenses normally borne by the airport operator in carrying out its current operations.
                  
               
                     (53)
                  
                  
                     Such funding does not constitute State aid if it is compensation for public services allocated for management of the airport in accordance with the conditions established by the Altmark judgment (24). In other cases, operating subsidies are operating aid. As Stated in Part 30A.3.1 of these guidelines, such aid may be declared compatible with the functioning of the EEA Agreement only on the basis of Article 61(3)(a) or (c), under certain conditions, in disadvantaged regions, or on the basis of Article 59(2) if it meets certain conditions which ensure that it is necessary for the operation of a service of general economic interest and does not affect trade to an extent contrary to the interests of the Contracting Parties.
                  
               
                     (54)
                  
                  
                     As regards the application of Article 59(2) of the EEA Agreement, as Stated in point 31 of these guidelines, the Commission Decision of 13 July 2005 on the application of Article 86 of the Treaty to State aid in the form of public service compensation considers compensation for public services constituting State aid granted to category D airports to be compatible, subject to certain conditions (25).
                  
               
                     (55)
                  
                  
                     To that end, the Authority will verify that the airport really has been entrusted with the operation of a service of general interest and that the compensation does not exceed what is necessary to cover the costs incurred in discharging the public service obligations, taking into account the relevant receipts and a reasonable profit.
                  
               
                     (56)
                  
                  
                     The award of public service missions to the airport must be recorded in one or more official documents, the form of which may be determined by each EFTA State. These documents should contain all the information needed to identify the specific costs of the public service, and must in particular specify;
                     
                                 —
                              
                              
                                 the precise nature of the public service obligation,
                              
                           
                                 —
                              
                              
                                 the operators and the territory in question,
                              
                           
                                 —
                              
                              
                                 the nature of any special or exclusive rights granted to the airport,
                              
                           
                                 —
                              
                              
                                 the arrangements for calculating, monitoring and reviewing compensation,
                              
                           
                                 —
                              
                              
                                 the means of preventing and correcting any over- or under compensation.
                              
                           
               
                     (57)
                  
                  
                     When calculating the amount of compensation, the costs and revenues to be taken into consideration must include all costs and revenues linked to performance of the service of general economic interest. If the airport operator in question has other special or exclusive rights associated with this service of general economic interest, the associated revenues must also be taken into account. Consequently, there must be a transparent accounting system and separation of the accounts for the operator's different activities (26).
                  
               30A.4.3.   Aid for airport services
         
                     (58)
                  
                  
                     Ground handling services are a commercial activity open to competition over a threshold of 2 million passengers annually under Directive 96/67/EC (27). An airport operator acting as a provider of ground handling services may charge different rates for the ground handling charges invoiced to airlines if these different rates reflect cost differences linked to the nature or scale of the services provided (28).
                  
               
                     (59)
                  
                  
                     Up to the threshold of 2 million passengers, the airport operator acting as service provider may offset its various sources of revenues and losses between purely commercial activities (such as its ground handling activities or the management of a car park), with the exclusion of public resources granted to it as airport authority or operator of a service of general economic interest. However, in the absence of competition in the provision of ground handling services, it must take particular care not to infringe national provisions or provisions of the EEA Agreement, in particular not to abuse its dominant market position, thereby infringing Article 54 of the EEA Agreement (which prohibits undertakings in a dominant position within the area covered by the EEA Agreement or in a substantial part of it from applying dissimilar conditions to equivalent transactions with different airlines, thereby placing them at a competitive disadvantage).
                  
               
                     (60)
                  
                  
                     Above the threshold of 2 million passengers, ground handling services must be self-financing and must not be cross-subsidised by the airport's other commercial revenues or by public resources granted to it as airport authority or operator of a service of general economic interest.
                  
               30A.5.   Start-up aid
         30A.5.1.   Objectives
         
                     (61)
                  
                  
                     Small airports often do not have the passenger volumes necessary for them to reach critical mass and the break-even point.
                  
               
                     (62)
                  
                  
                     There are no absolute figures with regard to the break-even point. The European Committee of the Regions has evaluated it at 1,5 million passengers per year, while the University of Cranfield study mentioned above, which cites two different figures (500 000 and 1 million passengers per year), shows that there are variations according to the country and the way in which the airports are organised (29).
                  
               
                     (63)
                  
                  
                     While certain regional airports can perform well when sufficient numbers of passengers are brought in by airlines carrying out public service obligations (30), or when social aid schemes are established by the public authorities, airlines prefer tried and tested hubs in good locations which provide rapid connections, have an established passenger base, and where they have slots which they do not wish to lose. Furthermore, in many cases, airport and air traffic policies and investment have for years concentrated traffic at major national cities.
                  
               
                     (64)
                  
                  
                     As a result, airlines are not always prepared, without appropriate incentives, to run the risk of opening routes from unknown and untested airports. This is why the Authority can accept that public aid be paid temporarily to airlines under certain conditions, if this provides them with the necessary incentive to create new routes or new schedules from regional airports and to attract the passenger numbers which will enable them to break even within a limited period. The Authority will ensure that such aid does not give any advantage to large airports already largely open to international traffic and competition.
                  
               
                     (65)
                  
                  
                     However, in the light of the general objective of intermodality and optimising the use of infrastructure described above, it will not be acceptable to grant start-up aid for a new air route corresponding to a high-speed train link.
                  
               
                     (66)
                  
                  
                     Further, the European Commission has laid down guidelines for the harmonious development of outermost regions (31). Their development strategy is based on three main principles: helping to make the regions more accessible, increasing their competitiveness and bolstering their regional integration in order to reduce the impact of their remoteness from the European economy.
                  
               
                     (67)
                  
                  
                     For these reasons the European Commission accepts that start-up aid for routes from the outermost regions is subject to more flexible compatibility criteria, in particular in terms of intensity and duration, and will not raise any objection to such aid for services to neighbouring non-member countries.
                     The Authority considers that similar provisions in terms of intensity and duration will be accepted for the regions referred to in Article 61(3) of the EEA Agreement and for sparsely populated regions.
                  
               30A.5.2.   Compatibility criteria
         
                     (68)
                  
                  
                     Financial start-up incentives, except in cases where the public authorities act as a private investor working in a market economy (see section 30A.3.2.4), advantage beneficiary undertakings and can therefore directly create distortions between companies as they reduce the beneficiary's operating costs.
                  
               
                     (69)
                  
                  
                     They can also indirectly affect competition between airports by helping airports to develop or by encouraging a company to “relocate” from one airport to another and transfer a route from an EEA airport to a regional one. For these reasons they usually constitute State aid and must be notified to the Authority.
                  
               
                     (70)
                  
                  
                     In view of the above objectives and the significant difficulties which can result from launching a new route, the Authority may approve such aid if it fulfils the following conditions:
                     
                                 (a)
                              
                              
                                 Recipients: the aid is paid to air carriers with a valid operating licence issued by a Contracting Party to the EEA Agreement pursuant to Council Regulation (EEC) No 2407/92 on licensing of air carriers (32).
                              
                           
                                 (b)
                              
                              
                                 Regional airports: the aid is paid for routes linking a regional airport in categories C or D to another airport within the area covered by the EEA Agreement. Aid for routes between national airports (category B) can be considered only in duly substantiated exceptional cases, in particular where one of the airports is located in a disadvantaged region.
                              
                           
                                 (c)
                              
                              
                                 New routes: aid will apply only to the opening of new routes or new schedules, as defined below, which will lead to an increase in the net volume of passengers (33).
                                 This aid must not encourage traffic simply to be transferred from one airline or company to another. In particular, it must not lead to a relocation of traffic which is unjustified with regard to the frequency and viability of existing services leaving from another airport in the same city, the same conurbation (34) or the same airport system (35), which serves the same or a similar destination under the same criteria. Also, start-up aid must not be paid when the new air route is already being operated by a high-speed rail service under the same criteria.
                                 The Authority will not accept cases of abuse in which a company seeks to circumvent the temporary nature of start-up aid by replacing a line receiving aid with a supposedly new line offering a similar service. In particular, aid will not be able to be granted to an airline which, having used up all the aid for a given route, applies for aid for a competing route departing from another airport in the same city or conurbation or the same airport system and serving the same or a similar destination. However, the mere substitution, during the aid period, of one route for another leaving from the same airport and expected to generate at least an equivalent number of passengers, will not call into question the continuation of payment of aid for the complete period, as long as this substitution does not affect the other criteria under which the aid was initially granted.
                              
                           
                                 (d)
                              
                              
                                 Long-term viability and degressiveness: the route receiving the aid must ultimately prove profitable, i.e. it must at least cover its costs, without public funding. For this reason start-up aid must be degressive and of limited duration.
                              
                           
                                 (e)
                              
                              
                                 Compensation for additional start-up costs: the amount of aid must be strictly linked to the additional start-up costs incurred in launching the new route or frequency and which the air operator will not have to bear once it is up and running. Examples of such costs are the marketing and advertising costs incurred at the outset for publicising the new link; they may include the installation costs incurred by the airline at the regional airport in question in order to launch the route, provided the airport falls within categories C or D and aid has not already been received in respect of the same costs. Conversely, aid cannot be granted in relation to standard operating costs such as hire or depreciation of aircraft, fuel, crew salaries, airport charges or catering costs. The remaining eligible costs must correspond to real costs obtained in normal market conditions.
                              
                           
                                 (f)
                              
                              
                                 Intensity and duration: degressive aid may be granted for a maximum period of three years. The amount of aid in any one year may not exceed 50 % of total eligible costs for that year and total aid may not exceed an average of 30 % of eligible costs.
                                 For routes from disadvantaged regions, i.e., the regions referred to in Article 61(3)(a), and sparsely populated regions, degressive aid may be granted for a maximum period of five years. The amount of aid in any one year may not exceed 50 % of total eligible costs for that year and total aid may not exceed an average of 40 % of eligible costs. If the aid is granted for five years, it may be maintained at 50 % of total eligible costs for the initial three years.
                                 In any event, the period during which start-up aid is granted to an airline must be substantially less than the period during which the airline undertakes to operate from the airport in question, as indicated in the business plan required in point 70(i). Furthermore, the aid should be stopped once the objectives in terms of passengers have been reached or when the line breaks even, even if this is achieved before the end of the period initially foreseen.
                              
                           
                                 (g)
                              
                              
                                 Link with the development of the route: aid payments must be linked to the net development of the number of passengers transported. The amount per passenger must, for example, decrease with the net increase in traffic for the aid to remain an incentive and to avoid adjusting ceilings.
                              
                           
                                 (h)
                              
                              
                                 Non-discriminatory allocation: any public body which plans to grant start-up aid to an airline for a new route, whether or not via an airport, must make its plans public in good time and with adequate publicity to enable all interested airlines to offer their services. The notification must in particular include the description of the route as well as the objective criteria in terms of the amount and the duration of the aid. The rules and principles relating to public procurement and concessions must be respected where applicable.
                              
                           
                                 (i)
                              
                              
                                 Impact on other routes and business plan: when submitting its application, any airline which proposes a service to a public body offering to grant start-up aid must provide a business plan showing, over a substantial period, the viability of the route after the aid has expired. The public body should also carry out an analysis of the impact of the new route on competing routes prior to granting start-up aid.
                              
                           
                                 (j)
                              
                              
                                 Publicity: The EFTA States must ensure that the list of routes receiving aid is published annually for each airport, in each instance indicating the source of public funding, the recipient company, the amount of aid paid and the number of passengers concerned.
                              
                           
                                 (k)
                              
                              
                                 Appeals: in addition to the appeal procedures provided for by the “Public Procurement” Directives 89/665/EEC and 92/13/EEC (36), where applicable, appeal procedures must be provided for at the EFTA State level to ensure that there is no discrimination in the granting of aid.
                              
                           
                                 (l)
                              
                              
                                 Penalties: penalty mechanisms must be implemented in the event that a carrier fails to keep to the undertakings that it gave in relation to an airport when the aid was paid. A system for recovering aid or for seizing a guarantee initially deposited by the carrier will allow the airport to ensure that the airline honours its commitments.
                              
                           
               
                     (71)
                  
                  
                     Cumulation: start-up aid cannot be combined with other types of aid granted for the operation of a route, such as aid of a social nature granted to certain categories of passengers and compensation for discharging public services. In addition, such aid cannot be granted when access to a route has been reserved for a single carrier under Article 4 of Regulation (EEC) No 2408/92 (37), and in particular paragraph 1(d) of that Article. Also, in accordance with the rules of proportionality, such aid cannot be combined with other aid granted to cover the same costs, including aid paid in another State.
                  
               
                     (72)
                  
                  
                     Start-up aid must be notified to the Authority. The Authority calls on the EFTA States to notify start-up aid schemes rather than individual cases since this results in greater coherence across the area covered by the EEA Agreement. The Authority may carry out a case-by-case assessment of aid or a scheme which fails to fully comply with these criteria, but the end result of which would be comparable.
                  
               30A.6.   Recipients of previous unlawful aid
         
                     (73)
                  
                  
                     When unlawful aid, on which the Authority has adopted a negative decision involving a recovery order, has been granted to a company and the aid has not been recovered in accordance with Article 14 in Part II of Protocol 3 to the Surveillance and Court Agreement, the assessment of all airport infrastructure aid or start-up aid should take account of both the cumulative effect of the earlier and the new aid and the fact that the earlier aid has not been repaid (38).
                  
               30A.7.   Appropriate measures within the meaning of Article 1(1) in Part I of Protocol 3 to the Surveillance and Court agreement
         
                     (74)
                  
                  
                     In accordance with Article 1(1) in Part I of Protocol 3 to the Surveillance and Court Agreement, the Authority proposes that the EFTA States amend their existing schemes relating to State aid covered by these guidelines to conform to these guidelines by 1 June 2007 at the latest. The EFTA States are asked to confirm in writing that they accept these proposals by 1 June 2006 at the latest.
                  
               
                     (75)
                  
                  
                     Should an EFTA State fail to confirm its acceptance in writing before that date, the Authority will apply Article 19(2) in Part II of Protocol 3 to the Surveillance and Court Agreement and, if necessary, initiate the proceedings provided for in that Article.
                  
               30A.8.   Date of application
         
                     (76)
                  
                  
                     These guidelines will apply as of their adoption by the Authority. Notifications registered by the Authority prior to that date will be examined in the light of the rules in force at the time of notification.
                     The Authority will assess the compatibility of all aid to finance airport infrastructure, or start-up aid granted without its authorisation and which therefore infringes Article 1(3) in Part I of Protocol 3 to the Surveillance and Court Agreement, on the basis of these guidelines if payment of the aid started after the guidelines were adopted. In other cases, the Authority will carry out an assessment based on the rules applicable when the aid started to be paid.
                  
               
                     (77)
                  
                  
                     The Authority informs the EFTA States and interested parties that it intends to undertake a detailed assessment of the application of these guidelines four years after the date of their implementation. The results of that study may lead the Authority to revise these guidelines.
                  
               
      
         (1)  Council Regulation (EEC) No 2407/92 of 23 July 1992 on licensing of air carriers (OJ L 240, 24.8.1992), incorporated into point 66b of Annex XIII to the EEA Agreement by Joint Committee Decision No 7/94 of 21 March 1994 (OJ L 160, 28.6.1994, p. 1 and the EEA Supplement No 17, 28.6.1994), Council Regulation (EEC) No 2408/92 of 23 July 1992 on access for Community air carriers to intra-Community air routes (OJ L 240, 24.8.1992), incorporated into point 64a of Annex XIII of the EEA Agreement by Joint Committee Decision No 7/94 of 21 March 1994 (OJ L 160, 28.6.1994, p. 1 and the EEA Supplement No 17, 28.6.1994) and Council Regulation (EEC) No 2409/92 of 23 July 1992 on fares and rates for air services (OJ L 240, 24.8.1992), incorporated into point 65 of Annex XIII of the EEA Agreement by Joint Committee Decision No 7/94 of 21 March 1994 (OJ L 160, 28.6.1994, p. 1 and the EEA Supplement No 17, 28.6.1994).
      
         (2)  Council Regulation (EEC) No 95/93 of 18 January 1993 on common rules for the allocation of slots at Community airports (OJ L 14, 22.1.1993), incorporated into point 64b of Annex XIII of the EEA Agreement by Joint Committee Decision No 154/2004 (OJ L 102, 21.4.2005, p. 33 and the EEA Supplement No 20, 21.4.2005).
      
         (3)  Council Directive 96/67/EC of 15 October 1996 on access to the ground handling market at Community airports (OJ L 272, 25.10.1996), incorporated into point 64c of Annex XIII of the EEA Agreement by Joint Committee Decision No 79/2000 of 2 October 2000 (OJ L 315, 14.12.2000, p. 20 and the EEA Supplement No 59, 14.12.2000).
      
         (4)  Council Regulation (EEC) No 2299/89 of 24 July 1989 on a code of conduct for computerised reservation systems (OJ L 220, 29.7.1989), incorporated into point 63 of Annex XIII of the EEA Agreement by Joint Committee Decision No 148/99 of 5 November 1999 (OJ L 15, 18.1.2001, p. 45 and the EEA Supplement No 3, 18.1.2001).
      
         (5)  The full text of the Surveillance and Court Agreement, including all its amendments can be found at the website of the EFTA Secretariat: http://secretariat.efta.int/Web/legaldocuments/
      
         (6)  “Study on competition between airports and the application of State aid rules” — Cranfield University, June 2002.
      
         (7)  Chapter 30 of the EFTA Surveillance Authority State Aid Guidelines on aid to the aviation sector (OJ L 124, 23.5.1996 and the EEA Supplement No 23, 23.5.1996) refers to the Community guidelines on the application of Articles 92 and 93 of the EC Treaty and Article 61 of the EEA Agreement to State aid in the aviation sector and states that the Authority will apply criteria corresponding to those found in the Commission guidelines.
      
         (8)  White Paper, European Transport Policy for 2010: “Time to decide” COM(2001) 370 final.
      
         (9)  The EFTA Surveillance Authority’s State Aid Guidelines on national regional aid (OJ L 111, 29.4.1999 and the EEA Supplement No 18, 29.4.1999). In the guidelines on national regional aid, operating aid is defined as aid “intended to reduce a firm’s current expenditure” (point 25.4.26), while initial investment aid relates to “an investment in fixed capital relating to the creation of a new establishment, the extension of an existing establishment, or the commencement of an activity that involves a fundamental change in the product or procedure provided by an existing establishment” (point 25.4.6).
      
         (10)  See point 25.4.26 et seq. of the guidelines on national regional aid.
      
         (11)  According to Court of Justice case law, any activity consisting in offering goods and services on a given market is an economic activity. See Case C-35/96 Commission v Italy [1998] ECR I-3851 and Cases C-180/98 to 184/98 Pavlov [2000] ECR I-6451.
      
         (12)  Cases C-159/91 and C-160/91, Poucet v AGF and Pistre v Cancava [1993] ECR I-637.
      
         (13)  Case T-128/98, Aéroports de Paris v Commission of the European Communities [2000] ECR II-3929, confirmed by Case C-82/01 [2002] ECR I-9297, points 75-79.
      
         (14)  Case C-364/92 SAT Fluggesellschaft v Eurocontrol [1994] ECR I-43.
      
         (15)  Case C-343/95 Calì & Figli v Servizi ecologici porto di Genova [1997] ECR I-1547. Commission Decision N309/2002 of 19 March 2003, Aviation security — compensation for costs incurred following the attacks of 11 September 2001. Commission Decision N438/2002 of 16 January 2002, aid in support of public authority functions in the port sector.
      
         (16)  Case C-280/00 Altmark Trans and Regierungspräsidium Magdeburg v Nahverkehrsgesellschaft Altmark [2003] ECR I-7747.
      
         (17)  See Commission Decision 2005/842/EC on the application of Article 86(2) of the EC Treaty to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest (OJ L 312, 29.11.2005, p. 67). The decision has not yet been incorporated into the EEA Agreement. Hence, until the decision is incorporated into the EEA legal framework, these types of public service compensations are subject to the general notification requirement as stipulated in Part I and Article 2 in Part II of Protocol 3 to the Surveillance and Court Agreement.
      
         (18)  Case 40/85 Kingdom of Belgium v Commission [1986] ECR I-2321.
      
         (19)  Joined Cases 188/80 to 190/80 French Republic, Italian Republic and United Kingdom of Great Britain and Northern Ireland v Commission of the European Communities [1982] ECR 2571, point 21.
      
         (20)  Case C-305/89 Italy v Commission (Alfa Romeo) [1991] ECR I-1603, point 20. Case T-228/99 Westdeutsche Landesbank Girozentrale v Commission [2003] ECR II-435, point(s) 250-270.
      
         (21)  See Commission Decision No 309/2002 — France: Air Safety — compensation for costs following the attacks of 11.9.2001 (OJ C 148, 25.6.2003).
      
         (22)  The EFTA Surveillance Authority Guidelines on State aid elements in sales of land and buildings by public authorities (OJ L 137, 8.6.2000 and EEA Supplement No 26, 8.6.2000). These guidelines correspond to Commission Communication on State aid elements in sales of land and buildings by public authorities.
      
         (23)  The European Commission report on competition policy, 1993, points 402 and 403.
      
         (24)  See footnote 16.
      
         (25)  The Decision has not yet been incorporated into the EEA Agreement. If incorporated, any compensation for public services constituting State aid granted to larger airports (categories A, B or C) or failing to meet the criteria and conditions of that act should still be notified and examined on a case-by-case basis.
      
         (26)  Although not applicable to the transport sector, Chapter 18C of the State Aid Guidelines on State aid in the form of public service compensation can provide indications of how paragraphs 55 to 57 apply [not yet published]. These guidelines correspond to the Community framework for State aid in the form of public service compensation. (OJ C 297, 29.11.2005, p. 4).
      
         (27)  Council Directive 96/67/EC of 15 October 1996 on access to the ground handling market at Community airports (OJ L 272, 25.10.1996), incorporated into point 64c of Annex XIII of the EEA Agreement by Joint Committee Decision No 79/2000 of 2 October 2000 (OJ L 315, 14.12.2000, p. 20 and the EEA Supplement No 59, 14.12.2000).
      
         (28)  Paragraph 85 of the decision of the European Commission to initiate the proceeding concerning the case of Ryanair at Charleroi reads, “With regard to ground handling tariffs, the Commission believes that economies of scale could be applied when an airport user makes significant use of a company’s assistance services. It comes as no great shock that the tariff applied to some companies will be lower than the general tariff, insofar as the service requested by these companies will be less than for other clients”.
      
         (29)  Report “Study on Competition between airports and the application of State Aid Rules”, Cranfield University, September 2002, points 5.33 and 6.11.
      
         (30)  Ibid. points 5-27: “To some extent, subsidisation of air services within the PSO framework can be interpreted, as an indirect subsidy to an airport”.
      
         (31)  Commission communications of 26 May 2004 [COM(2004) 343 final] and 6 August 2004 [SEC(2004) 1030] on a stronger partnership for the outermost regions.
      
         (32)  Council Regulation (EEC) No 2407/92 of 23 July 1992 on licensing of air carriers (OJ L 240, 24.8.1992), as incorporated into point 66b of Annex XIII to the EEA Agreement by Joint Committee Decision No 7/94 of 21 March 1994 (OJ L 160, 28.6.1994, p. 1 and the EEA Supplement No 17, 28.6.1994).
      
         (33)  This concerns in particular a seasonal route being made permanent or a non-daily frequency becoming at least daily.
      
         (34)  Council Regulation (EEC) No 2408/92 on access for Community air carriers to intra-Community air routes (OJ L 240, 24.8.1992, p. 8), incorporated into point 64a of Annex XIII to the EEA Agreement by Joint Committee Decision No 7/94 of 21 March 1994 (OJ L 160, 28.6.1994, p. 1 and the EEA Supplement No 17, 28.6.1994).
      
         (35)  As defined under Article 2(m) of Council Regulation (EEC) No 2408/92 on access for Community air carriers to intra-Community air routes (OJ L 240, 24.8.1992, p. 8), incorporated into point 64a of Annex XIII to the EEA Agreement by Joint Committee Decision No 7/94 of 21 March 1994 (OJ L 160, 28.6.1994, p. 1 and the EEA Supplement No 17, 28.6.1994).
      
         (36)  Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts (OJ L 395, 30.12.1989, p. 33), as incorporated into point 5 of Annex XVI to the EEA Agreement. Council Directive 92/13/EEC of 25 February 1992 coordinating the laws, regulations and administrative provisions relating to the application of Community rules on the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors (OJ L 76, 23.3.1992, p. 14) incorporated into point 5a of Annex XVI to the EEA Agreement by Joint Committee Decision No 7/94 of 21 March 1994 (OJ L 160, 28.6.1994, p. 1 and the EEA Supplement No 17, 28.6.1994).
      
         (37)  See footnote 1.
      
         (38)  See Case C-355/95 P Textilwerke Deggendorf v Commission [1997] ECR I-2549.’