EU Commission Approves Finland’s €350 Million Scheme to Compensate Finnair
The European Commission has approved Finland’s support of €351,38 million for Finnair in line with the EU State aid rules.
The aid aims to compensate the airline for the suffered damages due to the COVID-19 outbreak between March 16 and December 31, 2020.
“The aviation sector has been particularly affected by the various travel restrictions imposed to contain the spread of the coronavirus. With the measure we approved today, Finland will compensate Finnair for damages directly suffered as a result of such restrictions,” Executive Vice-President Margarethe Vestages said.
Finnair is one of the leading network airlines operating in Finland, with nearly 15 million passengers in 2019, representing 67 percent of the passengers transported to and from Finland in 2019, AtoZSerwisPlus.Pl reports.
According to a European Commission’s press release, in 2019, Finnair operated with 59 planes with flights to more than 130 destinations, mainly focused on European and Asian markets.
The restrictions carried out by Finland and other destination countries to control the Coronavirus spread have seriously affected the international and intercontinental flight operations of Finnair. Consequently, Finnair has suffered drastic losses until December 31, 2020.
In the first period of compensation, from March 16 to June 30, 2020, the allocated amount will reimburse Finnair for the losses caused by travel restrictions enforced in Finland and other EU and non-EU countries.
In the second period of compensation starting in July, the allocated amount will reimburse Finnair for the losses caused by the remaining and new travel restrictions, given the fact that many EU countries have already lifted their travel restrictions.
The European Commission approved the measure of the aid based on Article 107 (2)(b) of the Treaty on the Functioning of the European Union (TFEU) that allows the EU Commission to approve the aid measures given by the Member States to refund damaged companies by exceptional occurrences.
The Commission also found that the measure of the aid is appropriate as the quantitative analysis provided by Finland is in concordance with the compensation that it will be granted. Moreover, the aid includes a claw-back mechanism, meaning that any extra public support will have to be paid back to Finland.
The European Commission endorsed a communication to help respond to the COVID-19 outbreak. In such cases, the Member States can compensate various companies and sectors for the damage that they have experienced caused by extraordinary happenings, such as the Coronavirus outbreak, foreseen by Article 107(2)(b)TFEU.
The Commission has previously approved €511 million aid to compensate for the loss that commercial rail operators have experienced due to the Covid-19 outbreak and the restrictions in Italy and €39.7 million for the recapitalization of the Latvian International Airport.
Nearly €500 million aid measures have been allocated for Belgium, Portugal, and Romania in August 2020, another €106.7 million have been allocated for the French airline Corsair in December 2020, €650 million aid was dedicated to LOT Polish airlines on December 2020, and €73.02 million aid was approved for Italy’s Alitalia on January 2021.
