State aid: EC approves investment aid for UK airports St Mary's and Land's End
The European Commission has found public financing for infrastructure renovations at the two UK airports St. Mary's and Land's End to be in line with EU state aid rules. In particular, the Commission found that one measure does not constitute state aid whereas the other measure will further EU transport policy objectives without unduly distorting competition in the Single Market. Indeed, the two airports are important for connecting the remote archipelago of the Isles of Scilly with the British mainland, to the benefit of both residents and visitors.
In March 2014 the UK notified two projects aimed at modernising the infrastructure of two airports, St. Mary's on the Isles of Scilly and Land's End in Cornwall, by providing grants to the two airport operators. Intended measures include the resurfacing of runways, the hardening of grass runways by changing to asphalt, improving the approach lighting and navigational aids. Both projects are urgent, as the runways are close to the minimum friction level required by safety standards and the airport at Land's End has been repeatedly closed due to severe flooding.
The Commission's investigation has shown that the €7.9 million investment project at St. Mary's airport has no effect on competition because St. Mary's is the only airport on the archipelago and no similar transport services are available for reaching the mainland. Moreover, due to the short runways on the island, only very small aircraft with a small operating range are able to land on the airport. The public financing therefore does not involve state aid in the meaning of the EU rules.
The Commission's investigation has also found that the planned €3.2 million investment project at the airport of Lands' End will improve the accessibility of the region of Cornwall, in line with EU transport policy goals. Moreover, distortions of competition will be limited because in contrast to other regional airports Land's End airport offers essentially regional transport services to meet the needs of the residents of the islands. The Commission therefore concluded that the project was in line with the new EU guidelines on state aid to airports and airlines (Aviation Guidelines).
This is the first investment aid that the Commission has assessed under its Aviation Guidelines, which simplify the rules for assessing investment aid granted by Member States.
The investment project at Land's End airport is a good example of state aid that furthers the development of remote regions while keeping distortions of competition to a minimum. The guidelines encourage this type of aid.
On 20 March 2014, the Commission adopted new Aviation Guidelines (see IP/14/72), which came into force on 4 April 2014. The new guidelines replaced the previously applicable guidelines adopted in 2005.
Investment aid in favour of regional airports is in line with EU state aid rules when the airport is open to all users and has satisfactory medium-term prospects for the use of its infrastructure. The state aid must not exceed the funding gap (i.e. the difference between the expected income and the investment costs) of the project. Moreover, the investment must not lead to significant distortions of competition.
The airport of St. Mary's is located on the Isles of Scilly, UK, which are isolated remote islands in the Atlantic, 45 km to the west of the Cornish peninsula. The airport of St. Just is at Land's End in Cornwall, UK.
The non-confidential version of the decision will be available under the case number SA.38441 in the State Aid Register on the competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.
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