The European Commission has launched a state-aid investigation into the financing ofinfrastructure projects at Germany’s Leipzig/Halle airport, the main European air hub for DHL
Express. The Commission said the in-depth investigation had been set up to verify whether loans andcapital injections of more than €255 million granted to the airport were in line with EU state-aidrules.“At this stage, the Commission considers that Germany has not demonstrated that the publicfunding, which covers 100% of the total investment costs, is justified and proportionate,” the ECsaid. “The commission is particularly concerned that the aid may be giving the airport, which hasbecome the European hub of DHL Express, an unfair advantage vis à vis its competitors in Germany orelsewhere in Europe. The opening of an in-depth investigation gives interested third parties theopportunity to comment on the measures under assessment. It does not prejudge the outcome of theprocedure.”
In April 2010, Germany notified, “for legal certainty”, the public financing of newinfrastructure measures at Leipzig/Halle airport, including noise-abatement measures, creation ofde-icing areas, construction of taxiways and bridges, extension of aprons and hangars, constructionof a new aviation terminal and small aircraft shed, planning costs for the extension of thesouthern and northern runways, and security buildings and checkpoints.
The funding consists of injections of capital totalling €255 million into Leipzig/Halle Airportsince 2006 by its public shareholders, mainly from the states of Saxony and Saxony-Anhalt(Freistaat Sachsen, and Land Sachsen-Anhalt).
Germany takes the view that the construction of the infrastructure at Leipzig-Halle Airport isnot economically viable for a private institution and is of a safety and security nature. It claimsthat as no private investor would finance this infrastructure, it does not constitute an economicactivity in the meaning of EU state-aid rules.
However, a ruling by the European Union’s General Court, on 24 March 2011, confirmed theCommission’s view that the operation of an airport is an economic activity, of which theconstruction of airport infrastructure is an inseparable part.
“The Commission is of the opinion that the notified measures are essential for economicactivities undertaken by the airport operator and thus allow the airport to exercise its primaryeconomic activity,” the EC said. “The Commission has, therefore, doubts that the investment projectfalls under the public policy remit. As the capital increases were undertaken without an underlyingbusiness plan or assessment of the long-term prospects for profitability, the Commission takes thepreliminary view that they involve state aid.” The Commission also has doubts that the shareholderloans were granted at market rates.
A statement from the EC yesterday concluded: “The Commission, therefore, has doubts whether thefinancing of the notified infrastructure measures can be considered compatible with EU state aidrules, and in particular the 2005 EU Guidelines on the financing of airports and start-up aid toairlines from regional airports. The Commission considers that a large regional airport asLeipzig/Halle should be able to finance at least part of its infrastructure costs and that the aidis neither proportionate nor limited to the minimum necessary.”
Following the construction of Leipzig Airport’s southern runway in 2008, DHL Express moved itsmain European hub from Brussels Airport to Leipzig, increasing Leipzig Airport’s cargo throughputto more than 500,000 tonnes in 2009. The EC believes that, in view of the airport’s good economicprospects, a 100% public funding of the investments seems to be excessive, and may trigger awindfall profit for the airport that would distort competition with cargo airports not only fromGermany but also from other Member States, such as Vatry airport in France and Brussels airport inBelgium.
A spokesman for DHL Express told CEP-Research that the investigation did not involve DHL, andwas directed at the airport and its shareholders. He did not expect the investigation to have anyimpact on DHL or its operations.
The Commission has started a review of the 2005 EU Guidelines on the financing of airports andstart-up aid to airlines from regional airports. The consultation period ended on 7 June and theCommission is currently analysing submissions from stakeholders and Member States.
