State aid: Commission approves €6.3 million Cypriot incentive scheme towards airlines affected by coronavirus outbreak

The European Commission has approved a €6.3 million Cypriot incentive scheme towards airlinesaffected by the coronavirus outbreak. The scheme was approved under the State aid Temporary Framework. Under the scheme, the support will take the form of direct grants of up to €800,000 per company and will be accessible in a transparent manner to all interested airlines operating routes to and from Cyprus. The level of remuneration will depend on the aircraft’s load factor (that is, the number of passengers on board divided by the capacity of the aircraft in passenger numbers), starting from a load factor of 41% and up to a 70%, and it will be paid per each transported passenger. The aim of the scheme is to incentivize airlines in order to re-establish air routes from/to Cyprus and thus enable the recovery of air connectivity and tourism and broadly support the general economy and development of the island by providing support to airlines in a comprehensive and non-discriminatory manner. It is designed to support the air transport and tourism, sectors that have been particularly affected by the coronavirus outbreak. The measure is expected to benefit approximately 60 airlines from inside and outside the European Economic Area. The Commission found that the Cypriot scheme is in line with the conditions set out in the Temporary Framework. In particular, the aid will be granted before 31 December 2020 and will not exceed €800,000 per company. The Commission concluded that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. On this basis, the Commission approved the measures under EU State aid rules. More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here. The non-confidential version of the decision will be made available under the case number SA.57691 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.