2004 Aviation Guidelines EUROPEAN COMMISSION Jean-Louis COLSON, Brussels, 08 September 2009

| 2 Management of an airport is an economic activity. Aéroports de Paris (ADP) Judgments T-128/98 of and C-82/01P of

| 3 The Commission endorsed these judgments in its Community guidelines on financing of airports and start-up aid to airlines departing from regional airports – Communication of (OJ C 312, p.1).

| 4 Point 31 of the Guidelines In the « Aéroports de Paris » case, 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 (…).

| 5 Nevertheless the Court judgment distinguishes between commercial activities and activities falling within the public policy remit :

| 6 « Activities which fall within the exercise of its official powers as a public authority and are separable fromits activities in the exercise of such powers ».

| 7 Commission also endorsed this view in its 2005 Guidelines

| 8 Points 32 and 33 « It is necessary to distinguish between [the] activities [of an airport] and to establish to what extent [they] are of an economic nature ». « Such activities include safety, air traffic control, police, customs, etc ».

| 9 Airports : Investment aid 2005 Aviation State Aid Guidelines: define 5 criteria for assessing investment aid - construction and operation of the infrastructure meets a clearly defined objective of general interest (regional development, accessibility, etc.), - infrastructure is necessary and proportional to the objective which has been set, - 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, - development of trade is not affected to an extent contrary to the Community interest.

| 10 In practice, around 20 positive decisions on notified cases since the 2005 Airport Guidelines.

| 11 Airports: Operating aid (1) - General Principle: operating aid is not authorized, as it keeps inefficient firms afloat - Exception: compensation for public service obligations (PSO) Aviation State aid Guidelines, point 34: PSO for overall management of an airport only in exceptional cases, e.g. isolated region; otherwise, PSO limited to certain activities.

| 12 Airports: Operating aid (2) - Notification exemption for PSO (“Altmark”): Less than 1 million passengers (category D airport); less than 30 million EUR compensation and less than 100 million EUR turn-over - Compatibility criteria (2005 Guidelines, points 65 to 67): entrustment; no over-compensation; separation of accounts.

| 13 Start-up aid for new routes Point 71 of the 2005 Guidelines « Small airports often do not have the passenger volumes necessary for them to reach critical mass and the break-even point ».

| 14 Point 74 of the 2005 Guidelines « 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 Commission 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 Commission will ensure that such aid does give any advantage to large airports already largely open to international traffic and competition ».

| criteria developed in the 2005 Aviation Guidelines -Departure from category C or D airport (less than 5 million passengers) -Aid only for new routes (including catchment area and high speed trains) -Long-term viability and degressivity -Compensation for additional start-up costs linked to new route (real costs) -3 years duration, max. 50% in the first year and max 30% over three years -Non-discriminatory allocation -Business plan -Publicity; Appeals; Penalties

| 16 Case practice 6 compatible decisions of which national schemes in UK, Cyprus, Malta. 10 openings

| 17 Airlines: Rescue and restructuring Aviation Guidelines: a type of restructuring aid to take account of the effect of market liberalisation on flag carriers - Since 1999: Application in parallel with the Rescue and Restructuring guidelines (last renewed 2004) - Decisions: Alitalia; Olympic Airways/Airlines; Cyprus Airways, Austrian Airlines.

| 18 No-Aid Decisions - Olympic Airlines/Airways - Alitalia - Legal Assessment - Rationale

| 19 Reflexion lines

| 20 -Point 86 of the 2005 Guidelines Commission must undertake a detailed assessment of the application of the Guidelines four years after the date of their implementation  END 2009

| 21 - Ryanair/Charleroi ruling of December Lessons to draw: - Reduction of an airport charge is not necessarily a State aid even if the charge is a tax under national law. - Private Investor Test must be assessed globally at the level of the public authority when this public authority owns the airport and both the public authority and the airport grant support to an airline.

| 22 -Better definition of public policy infrastructure. - Distinction between owner of the infrastructure and manager of the infrastructure. - New compatibility criteria for start-up aid. - Other fields. - Crisis measures.

Thank you for your attention!