(1)

By letters dated 28 July 2008, 20, 22 and 23 September 2008, 1 and 21 October 2008 and 20 November 2008, complaints were lodged with the Commission by a number of citizens concerning advantages that had allegedly been granted to the airline Ryanair at La Rochelle-Île de Ré airport (‘the airport’), and financial contributions allegedly received by the airport. The complaints referred to the report on the final findings of the Poitou-Charentes Regional Court of Auditors (‘CRC’) of 13 May 2008 (‘CRC report’) on the management of the La Rochelle Chamber of Commerce and Industry (‘CCI’).

(2)

By letter dated 17 March 2009, the Commission sent the French authorities a non-confidential version of the complaints and asked them for their comments concerning the measures at issue. This letter was resent by the Commission on 25 May 2011. By letter of 20 June 2011, the French authorities requested an extension of the deadline for their reply until 26 July 2011, to which the Commission agreed by letter of 21 June 2011. The French authorities asked for a further extension of the deadline to 26 August 2011, which the Commission again accepted in its letter of 28 July 2011. The French authorities finally sent the requested answers by letter dated 30 August 2011.

(3)

By letter of 11 April 2011, the Commission requested additional information from Ryanair, which replied by letter of 22 July 2011. The Commission forwarded these comments to France for its remarks by letter of 14 October 2011. In the absence of any response, the Commission sent a reminder on 16 November 2011. By letter of 21 November 2011, the French authorities informed the Commission that they did not wish to respond to Ryanair’s comments.

(4)

By letter dated 8 February 2012, the Commission informed France of its decision (‘the opening decision’) to initiate the procedure laid down in Article 108(2) of the Treaty on the Functioning of the European Union (TFEU) regarding the aid potentially granted by the CCI to the airlines Ryanair, Jet2, Flybe, Aer Arann, easyJet and Buzz.

(5)

By letter dated 22 February 2012, the Commission asked France to provide further information. By letter dated 12 March 2012, France requested a further extension of the deadline for replying to the requests for additional information made in the opening decision and the letter of 22 February 2012. On 13 April 2012, France submitted its comments together with the information and documents requested by the Commission in the opening decision. Given that certain information was missing, the Commission sent a reminder to France by letter dated 19 April 2012. The French authorities finally sent their answers by letter dated 27 April 2012.

(6)

On 16 April 2012, Ryanair sent the Commission its comments on other cases in which it was involved and asked the Commission to take its comments into account for all the State aid cases involving Ryanair.

(7)

The Commission decision was published in the Official Journal of the European Union (3) on 4 May 2012. The Commission invited interested parties to submit their comments on the measures in question within one month of the publication date.

(8)

By letter dated 16 July 2012, the Commission again asked France to provide further information. France replied by letter dated 16 August 2012 (and the corrigendum thereto, dated 5 September 2012).

(9)

The Commission received comments from interested parties. The CCI submitted its comments on 24 July 2012. On 1 June 2012, Ryanair’s subsidiary, Airport Marketing Services (‘AMS’), submitted its comments. Moreover, on 1 June 2012, 3 June 2013, 3 February 2014 and 10 April 2015, Ryanair submitted a series of comments and economic analysis reports prepared by an economic analysis consultancy firm (Oxera).

(10)

The Commission also received comments from a number of other interested parties, including public entities (4), undertakings (5), associations (6) and individuals.

(11)

In addition, on 11 April 2013, 23 December 2013, 9 and 31 January 2014, 7 February 2014, 28 March 2014, 27 January 2015, 7 December 2015 and 1 April 2019, Ryanair submitted a set of general comments, all relating to several State aid cases initiated by the Commission and involving Ryanair. On 15 and 29 September 2014, Ryanair also submitted economic analysis reports drawn up by Oxera relating to several State aid cases involving Ryanair.

(12)

By letters dated 15 June 2012, 3 May 2013, 9 and 23 January 2014, 4 February 2014, 2 July 2014, 12 September 2014, 19 May 2015, 16 December 2015 and 17 May 2019, the Commission sent France the comments made by interested parties. The Commission gave France the opportunity to respond to these comments. France replied to these letters on 13 July 2012, 25 July 2012, 29 January 2014, 23 May 2014, 18 December 2015 and 24 June 2019. It its letter of 13 July 2012, France informed the Commission that it had no observations to make in respect of the comments submitted, notwithstanding the remarks it had already sent in connection with the Marseille Provence airport case (7). In addition, by letters of 25 July 2012, 29 January 2014, 23 May 2014 and 18 December 2015, France informed the Commission that it did not wish to submit any observations on the comments by third parties.

(13)

The Commission sent letters to France and the interested third parties that had already submitted comments informing them of its intention to assess the compatibility of the aid measures in question with the internal market based on the EU Guidelines on State aid to airports and airlines (8) (‘the 2014 Guidelines’). The Commission invited the recipients of these letters to comment in this connection, if they so wished. In addition, on 15 April 2014 a notice was published in the Official Journal of the European Union (9) inviting France and interested third parties to submit their comments in this connection.

(14)

France submitted its comments on the 2014 Guidelines on 19 March 2014.

(15)

The Commission received comments from the CCI (11 June 2014), Communauté d’Agglomération de La Rochelle [Authority for the La Rochelle Conurbation] (6 June 2014), Union Départementale des Offices du Tourisme et des Syndicats d’Initiative (UDOTSI) [Charente-Maritime Association of Tourist Information Offices] (13 May 2014), Angoulême CCI (7 May 2014), Irium Holding Group SAS (2 May 2014), Groupe Cafés Merling (30 April 2014) and the NGO Transport & Environnement (13 May 2014). By letter dated 2 July 2014, the various comments were forwarded to France, which did not wish to make any response.

(16)

By letter dated 19 May 2015, the Commission asked France to provide further information. France replied by letters dated 4 August 2015, 18 November 2015, 4 December 2015 and 14 March 2016.

(17)

By letter dated 18 November 2016, the Commission asked France to provide further information. France replied by letters dated 20 December 2016, 15 February 2017, 11 July 2017 and 20 July 2017.

(18)

By letter dated 29 March 2017, the Commission asked France to provide further information. France replied by letter dated 18 August 2017.

(19)

By letter dated 19 May 2017, the Commission asked France to provide further information. France replied by letters dated 18 August 2017 and 15 November 2017.

(20)

By letter dated 18 August 2017, the Commission asked France to provide further information. France replied by letter dated 16 April 2018.

(21)

By letter dated 5 December 2017, the Commission asked France to provide further information. France replied by letter dated 16 February 2018.

(22)

By letter dated 9 April 2019, the Commission asked France to provide further information. France replied by letter dated 21 June 2019.

(23)

La Rochelle-Île de Ré airport is located in La Rochelle, in the Department of Charente-Maritime in France, 5 km north-west of La Rochelle and 2 km from the Île de Ré bridge. The airport is open to national and international commercial traffic.

(24)

In 1936, the French State, the city of La Rochelle and the CCI took the decision to open an airport. This decision fell within the scope permitted under the Law of 20 June 1933 amending the Law of 9 April 1898 on chambers of commerce. The Law of 9 April 1898 on chambers of commerce, as initially worded, stated that ‘chambers of commerce and industry may be declared concession-holders for public works or entrusted with public services, in particular those relating to seaports and waterways’. The Law of 20 June 1933 extended this provision to airports. The aerodrome opened in 1939.

(25)

The airport’s main runway is 2 255 metres long and 45 metres wide. France estimates that the airport’s theoretical maximum annual capacity is 700 000 passengers.

(26)

The airport is operated by the CCI, which is also the airport’s owner. The accounts of the ‘airport arm’ (‘airport arm’ or ‘CCI-Airport’) are separate from those of the CCI’s general arm (‘the CCI’s general arm’) (10).

(27)

An overview of passenger traffic at La Rochelle airport over recent years can be found in Table 3 below. In accordance with point 15 of the 2005 Community guidelines on financing of airports and start-up aid to airlines departing from regional airports (11) (‘the 2005 Guidelines’), La Rochelle airport is a category D airport, i.e. a ‘small regional airport’.

(28)

During the period under investigation, the airport was mostly used by low-cost airlines, namely Ryanair, Airlinair (renamed Hop in 2013), Flybe, easyJet, Jet2 and Buzz. Routes are operated on an annual or seasonal basis, or on a more ad-hoc basis for charter flights. The airport is also used for leisure flights, military flights and official service flights.

(29)

According to France, the routes in operation during the period covered by the formal investigation procedure were as follows:

Table 1

Air traffic operated at La Rochelle airport from 2001 to 2006

Table 2

Air traffic operated at La Rochelle airport from 2007 to 2011

(30)

Table 3 below shows the total number of inbound and outbound passengers that used the airport between 2000 and 2012.

Table 3

Traffic and movements at La Rochelle airport

(31)

The measures subject to the formal investigation procedure relate to:

(32)

Between 2001 and 2011, the public authorities financed various public-remit tasks carried out by La Rochelle airport relating to safety and security (see Table 4 below). This funding falls within the scope of the formal investigation procedure.

(33)

According to France, this funding covers the cost of the public-remit tasks, implementation of which falls to the airport operators and payment, to the State. The funding comes under the general system for financing public-remit tasks in French airports as established in national law. This system is based on a tax levy – the airport tax – and an additional financing instrument. The background to and rules governing these instruments, and the tasks financed by them, have already been described in a number of recent Commission decisions (12). However, the Commission wishes to highlight the following aspects that must be considered when examining the measures covered by this Decision.

(34)

By law, airport safety and security tasks are entrusted to airport operators (13). They take the requisite action pursuant to EU and national law and cover the related costs. They are then reimbursed via the airport tax, the revenue from which is earmarked exclusively to cover the cost of the general interest tasks relating to safety and security.

(35)

The principles governing the operation of this financing instrument and the categories of expenditure that can be covered are set out in detail in two reference texts (14). The airport tax is collected by public or private entities operating aerodromes which, in the last calendar year for which figures are available, recorded traffic figures (embarked or disembarked) in excess of 5 000 traffic units (one traffic unit = one passenger or 100 kg of mail or freight).

(36)

In accordance with Article 1609 quatervicies of the General Tax Code, ‘At each aerodrome, the revenue from the tax shall be allocated to funding fire-fighting and rescue services, wildlife hazard prevention, security measures and environmental protection measures. A percentage of the tax revenue, set annually by means of an [interministerial] order, shall be used to fund automatic border control equipment using biometric identification installed in airports. The amount of the levy shall be set on the basis of the financing needs of each aerodrome, taking particular account of the services provided to comply with the regulations in force and the expected trend in traffic figures, costs and the operator’s other revenue’.

(37)

The amount of the levy is therefore set annually for each individual airport based on the safety and security costs to be covered. To that end, aerodrome operators draw up an annual statement of costs and traffic figures. These statements are sent to the local civil aviation safety authority, which checks and approves them in the light of the legislation in force. The amount of the levy is calculated by the French Civil Aviation Authority (Direction générale de l’aviation civile), which carries out a further check on all the declared figures, taking into account the cumulative results from previous years. The amount of the levy is then laid down in an interministerial order published in the French official gazette.

(38)

Moreover, Article 1609 quatervicies of the General Tax Code lays down that the figures declared by airport operators may be subject to checks by the French Civil Aviation Authority.

(39)

The rules for managing this process were initially set out in a Circular and, from 2010 onwards, the applicable rules were those laid down in the Interministerial Order of 30 December 2009 on the arrangements for the issuing of statements by aerodrome operators for the purpose of establishing the amount of the airport tax passenger levy. The rules are applied in the same way to all French airports.

(40)

In addition to the airport tax, the operator of La Rochelle airport also received State subsidies through the Intervention Fund for Airports and Air Transport (‘FIATA’). The FIATA was designed to supplement the revenue from the airport tax, which is often insufficient for airports with low traffic volumes as they cannot impose too high a levy on their users. In 2008, the State replaced the FIATA with a surcharge on the airport tax, resulting in the amount of the levy being higher than what is necessary to cover the safety and security costs at certain airports. This creates a surplus which is redistributed to the smallest airports in order to supplement their revenue from the airport tax.

(41)

With reference to the regulatory procedure set out above, France sent the Commission an overview of all the subsidies granted to La Rochelle airport through State resources for public-remit tasks. These subsidies are set out in Table 4 below:

Table 4

Costs associated with public-remit tasks (safety and security) and subsidies paid to the airport for those tasks

(42)

The CCI’s general arm provides services that are common to its various arms, including the airport arm, notably accounting, IT and human resources services. Table 5 below shows the services invoiced by the CCI to La Rochelle airport.

Table 5

Amounts invoiced by the CCI’s general arm to its airport arm during the period under investigation

(43)

The French authorities clarified the following points with regard to the services provided by the CCI to La Rochelle airport.

(44)

Furthermore, the French authorities pointed out that the amounts invoiced between 2001 and 2005 were lump-sum amounts. In 2006, the first allocation key was introduced and the allocation keys were then refined for the 2007-2012 period. An allocation key is a means of allocating costs using a fixed proportion or percentage depending on the nature of the indirect cost in order to determine the share that corresponds to a given business area (and/or service). Allocation keys assume the existence of a proportional relationship between the cost and the service provided. The allocation keys shown in Table 5 are based on six different criteria depending on the service supplied by the CCI’s general arm to the airport. Allocation keys are based on assumptions, regardless of the field in which they are used. As a result, in the present case, unless it can be demonstrated that the factors chosen or the calculation techniques used for the keys were completely unrealistic or seriously flawed, it cannot be considered that the keys are incorrect or undervalued. The French authorities have confirmed that the criteria used as the basis for the allocation keys are objective and relevant.

(45)

Lastly, the French authorities specified the amounts invoiced as well as the trends in passenger traffic figures between 2001 and 2012.

(46)

From 1 January 2002 to 30 June 2006, the Director of La Rochelle airport and a secretary helped to manage and operate Rochefort/Saint-Agnant airport (‘Rochefort airport’) under a services agreement concluded in partnership with the Rochefort Chamber of Commerce and Industry (15). La Rochelle CCI was selected to manage Rochefort airport on 11 July 2001 following a competitive tendering procedure.

(47)

The subject of the services agreement was the management and operation of Rochefort airport, covering aspects such as general administration services, services relating to works and the procurement of equipment, and services for users.

(48)

Over the entire duration of the agreement (2002-2006), the total cost of the services provided was EUR 991 235 (16). La Rochelle CCI received EUR 293 264 for these services.

(49)

From 2001 to 2012, the CCI’s general arm made repayable advance payments to the airport for a total cumulative amount of EUR 7 061 199. These repayable advances were granted with no return-on-capital requirement. According to France, these are loans which the airport is required to repay. The advances are recorded as assets in the balance sheet of the CCI’s general arm and as liabilities in the airport’s balance sheet, with the CCI using the airport’s real estate holdings as collateral to guarantee recovery of the loans.

(50)

The French authorities stated that the purpose of the repayable advances was to provide the airport with the necessary liquidity to launch infrastructure-related investment projects, on the one hand, and, on the other, to balance the budget and thus cover – temporarily, since these were advance payments – the airport’s operating deficit.

(51)

The CCI received subsidies from the Region of Poitou-Charentes, the Department of Charente-Maritime and the Communauté d’Agglomération de La Rochelle to contribute to promotional measures implemented by La Rochelle airport. Table 7 below provides an overview of these various subsidies.

Table 7

Financial contributions expected from and actually paid by the various local authorities towards the promotional measures implemented by La Rochelle airport

(52)

These contributions were paid under agreements between the CCI of the one part and the Department of Charente-Maritime, Communauté d’Agglomération de La Rochelle and the Region of Poitou-Charentes of the other part.

(53)

The French authorities were only able to provide the Commission with two agreements concluded in 2010, one with the Department of Charente-Maritime and the other with the Communauté d’Agglomération de La Rochelle (18).

(54)

Under both agreements from 2010, the Department of Charente-Maritime and the Communauté d’Agglomération de La Rochelle undertook to finance part of the ‘promotional measures that the CCI planned to launch targeting foreign tourists and in particular the markets in London, Dublin, Oslo and Brussels, since routes are operated to those cities’ (19). However, the agreements do not specify the type of promotional measures to be implemented by the CCI or the service providers. In particular, the agreements do not mention the fact that the service providers will be airlines or their subsidiaries.

(55)

Between 2001 and 2005, several local authorities and the European Regional Development Fund (ERDF) granted subsidies to La Rochelle airport (‘investment grants’) to finance various investments totalling around EUR 3 million (see Table 8 below):

(56)

These grants financed a number of investments, including:

(57)

The French authorities also stated that the investments were intended in particular to ensure that the aircraft commonly used by European airlines (B737, A320) could operate safely by expanding the runway to a width of 45 metres (La Rochelle was one of the few commercial airports with a 30-metre-wide runway), lengthening it by 115 metres to the west (in order to partly address the impact of the displaced threshold on the landing distance), and by adapting the taxiways and aprons to allow aircraft to move around safely. Furthermore, certain investments enabled the airport to fulfil its environmental protection obligations (Water Act).

(58)

The French authorities stated that La Rochelle airport did not receive any grants to finance the construction of a fee-paying car park in 2006 and its subsequent expansion in 2008.

(59)

Table 8 below provides an overview of all the investment measures for which investment grants were made.

(60)

According to the French authorities, the share of the investments not covered by grants was financed by the CCI, the owner and operator of the airport.

Table 8

Overview of all measures for which investment grants were made

(61)

According to France, all of the airport services provided by the airport operator to the various airport users are priced in accordance with its scale of charges for airport services. Each proposed charge is submitted to the Economic Consultative Committee (‘Cocoeco’) for its opinion, thereby allowing airport users to be consulted regarding the charges in force (airlines, workers’ unions, companies carrying out aerial work, associations). Thus, according to France, increases in non-aeronautical charges are submitted to the Cocoeco each year. Each charge the operator proposes is also sent to the Prefect of the Department before it comes into force, together with the Cocoeco’s opinion.

(62)

France sent the Commission the scales of charges for airport services that applied from 2001 to 2013. France also sent the Commission all of the opinions issued by the Cocoeco between 2001 and 2013, though not for 2005, as the Cocoeco did not meet that year.

(63)

France also stated that the runway lighting charge is paid by airlines depending on whether civil aviation rules governing movements at night or during bad weather apply (in such instances, the air navigation service is responsible for determining whether or not lighting must be used) or if the pilot requests lighting. According to the French authorities, the requisite information on whether or not lighting has been used during an aircraft movement is provided by the La Rochelle air navigation service, thus allowing the amount to be invoiced by the operator to the airline.

(64)

France states that the airport receives the following non-aeronautical charges: (i) charges for the occupation of state-owned property (fixed part and variable part based on the turnover generated) for the following activities: car parks, car-hire companies, aircraft hangars, restaurant, shops, advertising and (ii) various services provided for a fee.

(65)

The Commission’s investigation covers the agreements governing payment for services provided by the airport for the airlines’ aeronautical activities (‘airport services agreements’) and the agreements governing payment for marketing services provided by the airlines to the airport (‘marketing services agreements’) entered into by the CCI and the airlines from 2001 until the formal investigation procedure was launched on 8 February 2012.

(66)

The Commission has examined the airport charges agreements and/or the marketing services agreements entered into by the CCI and the following airlines: Ryanair/AMS, Jet2, Flybe, Aer Arann, Buzz and easyJet.

(67)

According to France, the following table contains all of the agreements concluded by the CCI with Ryanair and AMS during the period under investigation:

Table 9

List of agreements entered into by the CCI and Ryanair/AMS

(68)

As shown in Table 9, the CCI and Ryanair concluded several agreements setting airport charges and groundhandling service charges during the period under investigation.

(69)

For all of the airport services agreements covered in this section, France stated that:

(70)

It is thus clear from scrutiny of these agreements that the airport charges applied to Ryanair under each agreement correspond to the general rate card as approved by the Cocoeco.

(71)

This first agreement, signed on 10 December 2003 by the CCI and Ryanair, applying retroactively for a period of 3 years from 1 May 2003, set the amount of airport charges applicable to Ryanair. Under the agreement, Ryanair undertook to operate a daily route between La Rochelle airport and London Stansted and to potentially launch one or several routes to Brussels-Charleroi, Frankfurt-Hahn or to any other airport, provided that the routes in question enabled Ryanair to operate out of La Rochelle airport for at least 340 days per year in each year covered by the agreement.

(72)

Under Article 2(b) of Agreement No 1 of 10 December 2003, Ryanair was also required to pay a groundhandling charge of EUR […] for each BAe 146-300 aircraft, EUR […] for each Boeing 737-300 and EUR […] for each Boeing 737-800. France initially argued in its letter of 30 August 2011 that, other than refuelling, the CCI ‘does not provide any other groundhandling services’ and that ‘users conclude agreements directly with a private third party for groundhandling services’. In its reply of 12 April 2012, France further explained that the CCI had acted merely as an intermediary between Ryanair and Atlantica, the groundhandling company. According to the CCI, the airport services agreement of 10 December 2003 between the CCI and Ryanair merely specified the pricing set by Atlantica. France and the CCI state that, from 2007 onwards, Ryanair dealt with Atlantica directly. This responsibility was transferred to Atlantica under the groundhandling agreement of 1 February 2007, which kept the charge set out in the previous agreement with regard to groundhandling services for Ryanair’s Boeing 737-800 aircraft.

(73)

This agreement was concluded by the CCI and Ryanair on 1 May 2006 for a period of 3 years. Under the agreement, Ryanair undertook to operate a route between La Rochelle and London Stansted generating passenger traffic of at least 95 000 passengers per year.

(74)

This agreement was concluded by the CCI and Ryanair on 1 May 2006 for a period of 3 years. Under the agreement, Ryanair undertook to operate a route between La Rochelle and Dublin generating passenger traffic of at least 45 000 passengers per year.

(75)

This agreement implicitly replaced Agreement 2 and was concluded by the CCI and Ryanair on 1 February 2007, expiring on 30 April 2009. Under the agreement, Ryanair undertook to operate a daily route between La Rochelle airport and London Stansted and to potentially launch one or several routes to Brussels-Charleroi, Frankfurt-Hahn or to any other airport. It also undertook to operate out of La Rochelle airport for at least 340 days per year in each year covered by the agreement. From 1 February 2007 onwards, Atlantica provided groundhandling services for Ryanair under the groundhandling agreement referred to in recital 71.

(76)

This agreement was concluded by the CCI and Ryanair on 13 January 2010, applying retroactively from 1 May 2009 for a period of 3 years. Under the agreement, Ryanair undertook to operate a daily route between La Rochelle airport and London Stansted, Dublin and Brussels-Charleroi and to potentially launch one or several routes to any other airport served by Ryanair.

(77)

This agreement was amended twice by means of the two amendments set out below:

(78)

This amendment to Agreement 5 of 13 January 2010, in force until 31 March 2013, set out the routes to be operated by Ryanair from La Rochelle airport starting in the 2010 summer season on the following terms:

(79)

This amendment supplemented Agreement 5 of 13 January 2010.

(80)

By means of this amendment to Agreement 5 of 13 January 2010, Ryanair undertook to operate a summer-only route to Porto starting in the 2011 summer season with minimum passenger traffic of 17 000 passengers (inbound and outbound) for each full year.

(81)

As shown in Table 9, the CCI also concluded a number of marketing agreements. Between 2003 and 2006, the CCI concluded these agreements with Ryanair; from 2006 onwards, they were concluded with AMS, a wholly owned subsidiary of Ryanair.

(82)

On 1 December 2003, an agreement was concluded between the CCI and Ryanair, applying retroactively from 1 May 2003 until 31 December 2003. Ryanair undertook to operate a daily route between La Rochelle airport and London Stansted from 1 May 2003 and to potentially launch one or several additional routes to Frankfurt-Hahn, Brussels-Charleroi or to any other airport, operating at least 340 days per year.

(83)

Under this agreement, Ryanair undertook to display on its website three web links to tourism websites relating to the La Rochelle region, and to launch a campaign to promote its routes to La Rochelle airport.

(84)

The CCI paid Ryanair EUR […]:

(85)

On 3 June 2004, an agreement was concluded between the CCI and Ryanair covering the period from 1 January 2004 to 30 April 2006. Ryanair undertook to operate a daily route between La Rochelle airport and London Stansted from 1 January 2004 and to potentially launch one or several additional routes to Frankfurt-Hahn, Brussels-Charleroi or to any other airport, operating at least 340 days per year. Ryanair also committed to a load factor of at least 60 % for its flights.

(86)

Under this agreement, Ryanair undertook to display on its website web links to tourism websites relating to the La Rochelle region.

(87)

The CCI paid Ryanair EUR […] per year, a figure that would be reduced if Ryanair did not achieve its load factor targets. This amount would then be recalculated based on the number of passengers transported. Payments were to be made quarterly and any overpayments would be offset the following year.

(88)

The Commission did not receive any documents indicating the exact amount paid by the CCI to Ryanair for the following 2 years.

(89)

On 1 April 2006, the CCI and AMS concluded a 3-year agreement, entering into force on 1 May 2006. This agreement is linked to Ryanair’s undertaking to operate a route between La Rochelle and London Stansted with a minimum of 95 000 passengers per year.

(90)

Under this agreement, AMS undertook to provide various marketing services on the website www.ryanair.com for a sum of EUR […] per year, or EUR […] per month. These entailed:

(91)

Additional services could be agreed between the parties. The CCI would make monthly payments for these services on the basis of invoices sent by AMS.

(92)

On 1 April 2006, Agreement D was concluded by the CCI and AMS covering a 3-year period and entering into force on 1 May 2006. This agreement is linked to Ryanair’s undertaking to operate a route between La Rochelle and Dublin with a minimum of 45 000 passengers per year.

(93)

Under this agreement, AMS undertook to display on Ryanair’s website, www.ryanair.com, a link to a website designed by the CCI for 212 days per year, for a sum of EUR […] per year, or EUR […] per month. Additional services could be agreed between the parties. The CCI would make monthly payments for these services on the basis of invoices sent by AMS.

(94)

Agreement D was amended on 1 June 2007 by means of an amendment (Agreement E) making changes to the marketing services for 2007: AMS undertook to display on the Ryanair website a link to a website designed by the CCI for 45 days between June and September 2007 instead of 212 days per year, for a sum of EUR […].

(95)

On 21 September 2007, CCI-Airport signed Agreement F, which related to marketing services for Ryanair’s UK website. Agreement F amended Agreement C and made provision for marketing services in addition to those already scheduled, namely sending five additional promotional emails during winter 2007/2008 to the 255 000 English-speaking subscribers on Ryanair’s mailing list. The cost of these additional services would be EUR […].

(96)

On 17 September 2009, the CCI and AMS concluded a 3-year agreement, applying retroactively from 1 January 2009. This agreement is linked to Ryanair’s undertaking to operate a route between La Rochelle and London Stansted with a minimum of 53 000 passengers per year.

(97)

Under this agreement, AMS undertook to provide various marketing services for a sum of EUR […] per year. These entailed:

(98)

The total amount for these services was EUR […], to which a discount was applied. Additional services could be agreed between the parties.

(99)

On 17 September 2009, the CCI and AMS concluded a 3-year agreement, applying retroactively from 1 January 2009 (Agreement H). This agreement is linked to Ryanair’s undertaking to operate a route between La Rochelle and Brussels-Charleroi with a minimum of 9 000 passengers in the first year and 16 000 passengers in the following 2 years.

(100)

Under this agreement, AMS undertook to display on the Netherlands/Belgium homepage of the Ryanair website (www.ryanair.com) (21) a link designated by the CCI for 95 days in the first year and 160 days in the following 2 years. The cost of these services was EUR […] and EUR […] respectively, with the CCI being charged EUR […] in the first year and EUR […] in subsequent years. Additional services could be agreed between the parties.

(101)

This agreement was amended the same day by means of Agreement J, by virtue of which AMS undertook to display a link to the website designated by the CCI on the Netherlands/Belgium homepage of the Ryanair website, www.ryanair.com, for an additional 10 days in 2009. The cost of this additional service would be EUR […].

(102)

On 17 September 2009, the CCI and AMS concluded another 3-year agreement, applying retroactively from 1 January 2009 (Agreement I). This agreement is linked to Ryanair’s undertaking to operate a route between La Rochelle and Dublin with a minimum of 17 000 passengers per year.

(103)

Under this agreement, AMS undertook to display a link to a website designated by the CCI on the homepage of the Irish version of Ryanair’s website, www.ryanair.com, for 200 days. The charge for this service was EUR […], to be invoiced to the CCI at an annual cost of EUR […]. Additional services could be agreed between the parties.

(104)

On 25 February 2010, the CCI and AMS concluded a 3-year agreement, entering into force on 31 March 2010 (Agreement K). This agreement replaced and cancelled the previous agreements between the parties.

(105)

In 2009, three marketing services agreements were entered into covering each of the markets where promotional measures were planned, namely the United Kingdom, Ireland and Belgium. However, in 2010, the parties concluded a single agreement for all three of these markets.

(106)

This agreement is linked to Ryanair’s operation of routes connecting La Rochelle airport to the United Kingdom, Ireland, Belgium and Norway (the latter being a new route). Although the agreement does not contain any requirements in terms of passenger numbers or flight frequency, it does lay down that, in the event of a reduction in frequency or the cancellation of one of the routes in question, the marketing services package would be modified accordingly.

(107)

Under this agreement, AMS undertook to provide various marketing services for a sum of EUR […] per year. These entailed:

(108)

Additional services could be agreed between the parties.

(109)

This agreement was amended by means of the three amendments set out below:

(110)

The first amendment to Agreement K of 25 February 2010 was signed on 23 June 2010. This amendment is linked to Ryanair’s undertaking to operate a route between La Rochelle and Cork. Under this agreement, AMS undertook to extend to 70 days the period during which a link to a website chosen by the CCI would be displayed on Ryanair’s website, www.ryanair.com, for a sum of EUR […].

(111)

Under this agreement, signed on 11 February 2011, AMS undertook to provide various marketing services for a sum of EUR […], to be invoiced at an annual cost of EUR […]. These entailed:

(112)

A third amendment to Agreement K of 25 February 2010 was signed in 2011. Under this agreement, AMS undertook to provide various marketing services for a sum of EUR […], to be invoiced at a cost of EUR […] in the first year and EUR […] in the second year.

(113)

In the first year (from 31 March 2011 to 31 October 2011), the services were as follows:

(114)

In the second year (from 31 March 2012 to 31 October 2012), the services were as follows:

(115)

The charges decision of 27 March 2008 submitted to the Cocoeco sets out incentives for the launching of new scheduled routes. This pricing decision provides for a system of degressive discounts on aeronautical charges, limited to 3 years for the launch of new routes or the continued operation of existing routes during the winter scheduling season. The pricing decision sets out the conditions for granting these discounts:

(116)

The discounts available under these incentive measures are set out in Table 10 below.

Table 10

Discounts on airport charges provided for under the pricing decision of 27 March 2008

(117)

On 4 July 2008, the CCI concluded an airport charges agreement with the airline Jet2 covering a period of 3 years and applying retroactively from 12 May 2008, for services to Edinburgh and Leeds (23).

(118)

This agreement also makes provision for the granting of significant discounts on airport charges, corresponding to those set out in Table 10. Jet2 committed to offering at least 2 000 seats each season, failing which the discounts would be reduced by 5 % the following year.

(119)

Under this agreement, the CCI would make a ‘contribution to support marketing’ of EUR […] in year 1 (2008) and, in years 2 and 3 (in theory, 2009 and 2010), it would pay a marketing contribution, the amount of which would be ‘adjusted on the basis of the flight schedule’. Under the agreement, the amount of the marketing contribution could be adjusted by means of an amendment based on the load factor achieved and developments with regard to the flight schedule. In order for the contribution to be paid, the agreement stipulates that Jet2 was required to submit an invoice accompanied by supporting documents (marketing plan, invoices for promotional activities undertaken). Moreover, to qualify for the aid, Jet2 undertook to offer at least 2 000 seats per route for each IATA spring-summer season. Under the agreement, if the number of seats referred to above was not achieved during the period in question, Jet2 would not be eligible to receive the marketing contribution for the corresponding year.

(120)

In its letter of 30 August 2011, France informed the Commission that a sum of EUR […] was paid by the CCI in 2008 and 2009, but that the CCI did not make any payments to Jet2 in 2010.

(121)

The Commission’s investigation covers the airport charges agreements between the CCI and Flybe and Aer Arann:

(122)

These two agreements make provision for the granting of significant discounts on airport charges, corresponding to those set out in Table 10. Under the two agreements, the airlines committed to offering at least 2 000 seats each season, failing which the discounts would be reduced by 5 % the following year.

(123)

According to France, these discounts were granted in accordance with the conditions set out in the pricing decision for charges of 27 March 2008.

(124)

According to the CRC report, the airline Buzz, a subsidiary of KLM, launched the first low-cost route between La Rochelle and London Stansted in spring 2001 (24). The CRC report states that Buzz was subject to airport charges in accordance with the rate cards in force at the time. The CRC report also notes that Buzz benefited from promotional measures and communication expenditure totalling EUR 59 068,51 in 2001 and 2002. Lastly, the CRC notes that the route was effectively taken over by Ryanair in 2003, with the CCI invoicing Ryanair for its services under the same conditions that applied to Buzz until the end of the year.

(125)

France points out that a single agreement, the agreement of 8 November 2002, was entered into with Buzz. The airport services agreement of 8 November 2002 between the CCI and Buzz relates to the scheduled services operated by Buzz to La Rochelle airport and the conditions for using the infrastructure, covering a period of 3 years.

(126)

France also points out that the promotional measures and communication expenditure concerning Buzz referred to in the CRC report in fact relate to communication activities carried out under an agreement concluded with Maison de la France and not with Buzz. Thus, according to the CCI, no marketing payments were made to Buzz.

(127)

The CRC report mentions that easyJet ‘requested EUR [...] in marketing support’ for the Bristol route in 2006, support which, at the time the report was finalised, was allegedly the subject of an oral agreement.

(128)

France points out that, contrary to the information contained in the CRC report, easyJet did not receive any financing for marketing or advertising services. According to France, although the possibility of such a contribution was discussed informally during negotiations between the airport and easyJet, this never came to fruition and thus no marketing support agreement was ever concluded with easyJet.

(129)

The Commission considered it necessary to initiate the formal investigation procedure in order, on the one hand, to examine all the financial contributions made by the various public authorities and bodies to the CCI, the operator of La Rochelle airport, between 2001 and the date of the opening decision, as described in section 3.1, and, on the other hand, to assess potential aid granted to the airlines under all of the agreements between the CCI and the airlines, described in section 3.2.2, between 2001 and the date of the opening decision (8 February 2012).

(130)

On analysing the financial contributions made to the CCI, the operator of La Rochelle airport, the Commission expressed its view regarding the possible existence of aid within the meaning of Article 107(1) TFEU and its doubts about the compatibility of any aid with the internal market, within the meaning of Article 107(3)(c) TFEU.

(131)

The French authorities stated that some of the financing granted by the State was for the purpose of covering the costs of public-remit tasks that did not constitute an economic activity within the meaning of Article 107(1) TFEU. However, such financing must only be used to cover the costs resulting from those tasks and cannot be allocated to other economic activities (25). The Commission considered that it did not have enough information on the precise nature of the costs of the public-remit tasks and that it could also not rule out that the airport gained an advantage by having those costs covered.

(132)

France also stated that the financing in question did not constitute an advantage within the meaning of Article 107(1) TFEU. France also considers that the management of La Rochelle airport as a whole is a service of general economic interest. The Commission therefore examined the financial support measures for the CCI in the light of the Altmark case-law (26). The Commission considered that France had not demonstrated fulfilment of any of the four conditions laid down in the Altmark judgment; these criteria must be met in order to rule out the existence of an advantage when compensating costs arising from a service of general economic interest.

(133)

With regard to the compatibility of the financial contributions made to the CCI in the light of the market economy operator principle, the Commission could not rule out that the financial contributions in question had given the CCI a selective advantage over the entire period covered by the Decision. Consequently, it could not rule out that these measures constituted State aid.

(134)

The Commission stated that it did not have any evidence that would enable it to consider that the infrastructure subsidies from public bodies were financially profitable or that there was any expectation of a financial return.

(135)

As regards the subsidy to finance public-remit tasks, the Commission had doubts, as explained previously, as to the exact nature of the costs borne by the State and which, according to the French authorities, relate to the exercise of public authority powers.

(136)

The Commission, basing its assessment on the CRC report, considered that certain financial transfers between the accounts of the CCI’s general arm and those of its airport arm did not appear to have been made as purely commercial transactions.

(137)

First, it would appear that the CCI’s general arm underinvoiced some of the services it provided to the airport, as the airport’s accounts do not reflect the real cost of those services. The Commission did not rule out the possibility that the purpose of the alleged underinvoicing was to mitigate the loss made by the airport between 2001 and 2006.

(138)

Next, it appears that the airport’s operation was financed by means of repayable advances, paid from the CCI’s general budget to its airport accounts, which appear to constitute financial resources granted at zero cost.

(139)

The Commission also considered that the amounts paid to the CCI for the management and operation of Rochefort airport appeared to exceed what would be expected under normal market conditions, given the lack of traffic at the airport.

(140)

Moreover, of the amount received by La Rochelle airport for the provision of these services, EUR 40 000 did not cover the costs incurred by the CCI in providing the services, but was in fact a ‘service provider’s fee’, equating to an average rate of 16 % of the total amount invoiced for these services.

(141)

As regards the financial contributions towards the operation of certain routes paid to the CCI by various public authorities, the Commission questioned whether these measures were in fact payments to the airport, given that the payments went through the airport’s accounts, or whether they were aid to the airlines in question.

(142)

The Commission applied the 2005 Guidelines in order to assess the compatibility of the investment measures with the internal market (27). The Commission considered that it did not have all of the information required to enable it to assess the compatibility of the measures in question using the criteria in the 2005 Guidelines.

(143)

The Commission also had doubts regarding the compatibility with the internal market of the potential overcompensation of public-remit tasks, and the potential granting of operating aid to the CCI.

(144)

As regards the assessment of the measures in favour of the airlines, the Commission also expressed its view regarding the possible existence of aid within the meaning of Article 107(1) TFEU and its doubts about the compatibility of such aid with the internal market within the meaning of Article 107(3)(c) TFEU.

(145)

The Commission assessed the existence of a selective advantage in the agreements concluded with the airlines by examining whether, in similar circumstances, a private airport operator operating under normal market economy conditions would have entered into commercial agreements similar to those concluded by the CCI.

(146)

First, the Commission noted that, during the period under investigation, the airport was operating at a loss in every financial year and, according to the CRC report (28), the charges applied by the airport discriminated between the different airlines (29). For all of these reasons, the Commission doubts whether the airport acted as a prudent investor in its commercial dealings with the airlines serving La Rochelle airport.

(147)

In order to determine if the airport operator acted as a prudent market economy investor motivated by the prospect of profits (30), the Commission considered that the agreements concluded had to be assessed for each period in question, looking at the time they were signed.

(148)

The Commission considered that the airport services agreements and marketing services agreements had to be assessed together, as Ryanair and AMS formed a single beneficiary of the measures in question. Moreover, the Commission considered that the signing of the marketing services agreements was conditional on the conclusion of airport services agreements, the sole expected benefit of the marketing services agreements being an increase in the number of Ryanair passengers using the airport.

(149)

The Commission expressed doubts as to whether the airport operator, by signing the airport services agreements and marketing services agreements, had behaved as a prudent market economy operator pursuing a structural policy, whether general or sectoral, and motivated by the prospect of profits in the medium to long term. The Commission observed that there were no market studies and/or business plans relating to the various agreements signed with Ryanair/AMS and providing economic justification for the airport’s decision to enter into such commitments with Ryanair/AMS.

(150)

According to France, the economic rationale for concluding these agreements was the benefits they would bring for business and tourism in the region. However, the Commission pointed out that regional development considerations could not be taken into account for the purposes of the prudent investor test (31).

(151)

The Commission had doubts about the airport charges applied to Ryanair, with particular regard to the agreement signed on 10 December 2003, which granted Ryanair an exemption from the runway lighting charge.

(152)

The Commission noted that various public entities were involved in financing the cost of the marketing services agreements. It therefore considered whether it was appropriate to assess the airport’s conduct jointly with the conduct of the State or of the other public authorities that oversee the airport operator or are involved in financing it.

(153)

The Commission also questioned whether the groundhandling services covered by the successive agreements with Ryanair, particularly the groundhandling agreement between Ryanair and the CCI of 10 December 2003, actually existed. In its reply of 30 August 2011, France stated that the CCI did not provide any groundhandling services.

(154)

For all these reasons, the Commission considered it had doubts as to whether the airport and the public entities that had contributed or were contributing to Ryanair’s operating costs had acted as a prudent market economy investor by concluding the agreements under investigation.

(155)

The Commission noted that the agreements signed with the airlines Jet2, Flybe and Aer Arann gave rise to substantial discounts on charges (32) and that, according to France, these discounts were applied in a non-discriminatory manner to all the airlines that met the criteria set out in the pricing decision of 27 March 2008 (see section 3.3.2.2).

(156)

However, the Commission observed that, as mentioned by France, the airport was making a loss during the period under investigation. The profitability of these incentives was calculated on the basis of estimated operating costs, thus relieving the airlines of the obligation to contribute towards the financing of the infrastructure used. The Commission therefore considered that these incentives were liable to deprive the airport of operating income that was vital for ensuring its financial viability.

(157)

In response to a request for additional information, France referred to amounts paid to Jet2 in 2009 totalling EUR […] for its marketing services. Moreover, the CRC report mentions that easyJet ‘requested EUR [...] in marketing support’ for the Bristol route in 2006 (33), and that Buzz benefited from promotional measures and communication expenditure totalling EUR 59 068,51 in 2001 and 2002.

(158)

The Commission considered that it did not have enough information at its disposal showing that the amounts paid did not constitute aid, or that the payments were made in accordance with the prudent investor principle and that the marketing services rendered in exchange for those payments corresponded to the amounts paid.

(159)

The Commission considered that the compatibility of the measures granted following the publication of the 2005 Guidelines ought to be assessed in the light of those Guidelines, and that the compatibility of the measures granted prior to the publication of the Guidelines ought to be assessed in line with the Commission’s decision-making practice at the time the measures were granted. However, the Commission also noted that, by adopting the 2005 Guidelines, it had consolidated its decision-making practice with regard to assessing the compatibility of aid granted to airport operators and that the criteria set out in the Guidelines were also applicable to measures granted before the Guidelines were published.

(160)

The Commission considered that, in the light of the information at its disposal, it harboured doubts as to the compatibility with the internal market of the measures in favour of the airlines.

(161)

The Commission received comments from the following interested parties:

(162)

The comments made by the CCI follow on from those sent by France on 12 April 2012, with the CCI providing additional information with respect to France’s comments.

(163)

First, the CCI considers that the measures examined by the Commission were not liable to affect competition, since neither of the two airports located in the catchment area for La Rochelle airport (Rochefort/Saint-Aignan and Niort) offered commercial flights. It also contests the assertion that Angoulême airport is in the same catchment area as La Rochelle airport, given that it is located two hours away by car.

(164)

With regard to investment aid, the CCI considers that part of the investment aid under investigation was earmarked for public-remit tasks relating to safety and security and as a result does not constitute State aid. This applies to the tasks and infrastructure financed by the security charge and the infrastructure used for the following non-economic activities: security/screening checkpoint, customs checks and the hangar providing parking space for three fire-fighting vehicles.

(165)

The CCI also considers that it has been entrusted with a service of general economic interest (‘SGEI’). Under Article L.170-1 of the Commercial Code, the CCI is entrusted with ensuring the economic development, attractiveness and spatial planning of the area, and the management of the airport on its territory contributes to achieving these aims. The CCI highlights the fact that La Rochelle is cut off. It is the only French conurbation with more than 150 000 inhabitants that is not served by a motorway. In addition, it does not have a high-speed rail link, nor are there any plans for such a link to be built, and it currently takes more than three hours to reach Paris by train.

(166)

In the alternative, the CCI considers that the financing of infrastructure ought to be deemed compatible aid in the light of the Commission’s practices between 2000 and 2005 and in the light of the 2005 Guidelines.

(167)

As regards the underinvoicing of services supplied by the CCI’s general arm to CCI-Airport, the CCI stresses that provision of the services in question is pooled for the various arms of the CCI and that the services are structural in nature (accounting, IT, human resources), with their cost being distributed among all the arms of the CCI. It is therefore to be expected that the invoicing of the services is not underpinned by commercial logic and that the amounts invoiced are lower than they would be for an external organisation. According to the CCI, this is in line with the case-law of the Court, which accepts that the provision of services to entities within the same network does not always follow a purely commercial approach (34).

(168)

With regard to the overinvoicing of the services supplied to Rochefort/Saint-Agnant airport, the CCI takes the view that the contested amounts do not constitute additional invoicing, even while traffic exceeded the number of flights set out in the specifications for the services.

(169)

As for the repayable advances, the CCI argues that they cannot be regarded as subsidies, since they are loans that the airport is required to repay. The advances were in fact financing that was moved from one internal CCI budget heading to another, which explains why no interest was charged. Moreover, the CCI considers that it acted as would a private operator by addressing the liquidity needs of its airport.

(170)

Thus the CCI takes the view that, even if the Commission were to consider the financing for operations to be State aid, it should be considered compatible aid based on the 2014 Guidelines.

(171)

As regards the agreements between the airport and the airlines, first, the CCI considers that the agreements cannot be considered imputable to the State on the basis of the criteria set out in the Stardust judgment (35).

(172)

The CCI also considers that the price paid by the airport in its marketing services agreements did not exceed the market price. It notes in particular that the price paid by La Rochelle airport for its marketing services was in line with, or even below, the market price and was based on the rate card available on AMS’ website.

(173)

The CCI considers that the agreements with AMS were concluded in the pursuit of profitability, as they would improve the appeal of the airport and its overall relationship with Ryanair. The CCI takes the view that the 2003-2018 business plan, which took into account marketing costs to assess the airport’s relationship with Ryanair, shows that there was a long-term prospect of profitability.

(174)

With regard to the airport charges paid by the various airlines, the CCI points out that Ryanair’s exemption from the lighting charge is explained by the fact that the airline only operates daytime flights, meaning that lighting is not required.

(175)

With respect to the discounts on airport charges granted to certain airlines, the CCI considers that the sole aim of the discounts was for new routes to be launched and that the discounts were time-limited and non-discriminatory. Furthermore, it notes that the airport charges had a positive impact on the airport’s profitability.

(176)

As for the amounts paid to Jet2 for marketing services, the CCI applies the same reasoning as that set out above with respect to Ryanair and AMS. The CCI points out that, contrary to the claims made by the CRC in its report, easyJet did not receive any remuneration for marketing services.

(177)

With regard to the financial contributions made by public entities towards the operation of flight routes, the CCI disputes the notion that local authority financing of marketing agreements was taken into consideration in the airport’s business plan. It its view, the local authorities in question signed up to these marketing services agreements in the context of their general interest task of promoting their local area.

(178)

Ryanair disputes the Commission’s analysis in the opening decision. Ryanair considers that the Commission ought to use the comparative method when carrying out the prudent investor test. Ryanair also provided several financial studies based on the comparative method with the aim of demonstrating that the airport services agreements concluded between Ryanair and La Rochelle airport were in line with the market economy operator principle.

(179)

Ryanair is also critical of the Commission’s decision to assess the agreements with Ryanair and AMS jointly. Ryanair also refutes the notion that the measures implemented by the CCI were imputable to the State or involved the use of State resources.

(180)

In addition, Ryanair provided an economic study that sought to demonstrate that the agreements signed by Ryanair with La Rochelle airport were in line with the market economy operator principle when using the ex ante incremental profitability analysis method. According to this study, the analysis should not be limited to the actual duration of the agreements but should also consider their theoretical duration, taking into account any options to extend the agreements as provided for in the agreements themselves. The study is based on the average changes in Ryanair’s traffic figures at a number of other airports from which it operates.

(181)

Ryanair also considers that AMS’ prices are in line with market prices and that the decision by a public airport to purchase AMS’ services is consistent with the market economy operator test.

(182)

Ryanair also provided an economic report which sought to demonstrate that the agreements concluded with Ryanair and AMS were in line with the market economy operator principle when analysed together (an approach contested by Ryanair).

(183)

Lastly, Ryanair criticises the Commission’s assessment of the marketing services agreements with AMS whereby their only value is a potential increase in the number of passengers travelling with Ryanair while the agreements are in force, giving them no terminal value after their expiry. According to Ryanair, the airport services agreements and marketing services agreements generate incremental revenue while in force and a terminal value after their expiry. The terminal value of the marketing services agreements lies in an increase in traffic to the airport after expiry, as a result of its enhanced reputation.

(184)

AMS also contests the Commission’s analysis. First, AMS considers that the expected benefits of its marketing services agreements for airports are not limited merely to an increase in the number of passengers travelling with Ryanair. According to AMS, visitors to Ryanair’s website who are likely to be influenced by its advertising are not exclusively Ryanair customers and are likely to travel with other airlines. AMS also notes that the presence of a marketing services agreement between a given airport and Ryanair does not influence the load factor of its aircraft operating out of that airport.

(185)

AMS also contests the Commission’s decision to assess the agreements with Ryanair and AMS jointly. Lastly, AMS explains that advertising on Ryanair’s website allows an airport to attract more inbound passengers, who are more likely to spend money than outbound passengers, and thus increase its non-aeronautical revenue.

(186)

A number of individuals and the association Envol Vert informed the Commission that they supported the procedure that had been launched and denounced the subsidies received by Ryanair. Some individuals also question the true extent of the economic benefits generated by La Rochelle airport.

(187)

The other interested parties all highlight the contribution made by La Rochelle airport to the development of tourism and the economy in the area. They also stress that closing the airport would have a detrimental impact, particularly, for certain interested parties, with regard to their own economic activity.

(188)

Angoulême CCI points to the absence of competition between the airports of Angoulême and La Rochelle.

(189)

Poitou-Charentes CCI expressed its support for the European Parliament resolution (36) on the future of regional airports and air services in the European Union which seeks to acknowledge the role regional airports play in developing local economies.

(190)

The Region of Poitou-Charentes stresses that it did not pay any direct subsidies to the airport, only to the CCI, to enable it to carry out its tasks successfully.

(191)

The UDOTSI considers it crucial to maintain funding that enables the airlines receiving that funding to pursue and expand their activities at La Rochelle airport. The UDOTSI notes that a reduction in financing would lead to a drop in tourism in Charente-Maritime, which would have a negative impact on the local economy.

(192)

The Communauté d’Agglomération de La Rochelle and the Department of Charente-Maritime note that their contribution to the marketing campaigns carried out under the marketing agreements concluded with the CCI was within their remit and was in line with their mission to promote their local area. The Communauté d’Agglomération notes that it joined forces with the CCI under a general marketing agreement which enabled it to benefit from a reduction on the rates charged by AMS. Lastly, the Communauté d’Agglomération also notes that it has no direct interest in the management of La Rochelle airport and therefore considers that its financial participation should not be included in the airport’s business plan.

(193)

France argues that all the activities of the airport (including commercial aviation activities) constitute services of general interest, particularly the development of the region’s economy and tourism, such that no amount granted to the airport’s operators can be regarded as State aid.

(194)

France does not share the Commission’s opinion (37) regarding the applicability of the Aéroports de Paris (38) case-law to the infrastructure support measures granted prior to the publication of the 2005 Guidelines. It considers that the 1994 Guidelines (39) should be applied, particularly point 12 thereof, by virtue of which infrastructure aid is not subject to State aid control by the Commission. According to France, the departure from previous case-law in the Aéroports de Paris judgment, whereby the activities of managing and operating an airport were identified as economic activities, related to a major European hub and concerned a legal issue unconnected with airport financing, and could therefore not be considered directly binding on the Member States with regard to the financing of airport infrastructure, while the only text in force at the time, the 1994 Guidelines, clearly indicated that airport infrastructure projects constituted general economic policy measures falling outside the scope of State aid control. Moreover, France considers that the Commission’s practice was in line with the 1994 Guidelines (40). Given this climate of legal uncertainty, France considers that it acted in accordance with the only document with legal force at the time, the 1994 Guidelines.

(195)

Moreover, France considers that none of the disputed investment aid measures are liable to affect competition and that they should therefore be excluded from the scope of the Commission’s investigation.

(196)

According to France, the investments are in line with the prudent market economy investor principle. France states that the various investment measures are justified by the airport’s chronic problems with insufficient handling capacity. According to France, the CCI decided to address these constraints by investing in increasing the airport’s handling capacity. France maintains that the various investment decisions were systematically determined by the results of forecasting studies and of business plans drawn up ex ante in 2000, 2002 and 2008. Based on these studies, France considers that the CCI acted on the basis of reasonable assumptions when choosing, by means of a decision of 21 February 2003, to seek funding from the various public authorities referred to above.

(197)

France considers that its investments were limited and that, from a financial perspective, the airport’s approach was always very measured when making investments, as it waited until it was at saturation point before deciding to carry out work that had become crucial.

(198)

In the alternative, France considers that, if the Commission were to consider that the measures under investigation constituted State aid, it ought to consider them compatible with the internal market, as the measures were granted in order to perform general economic interest tasks that fulfil the conditions laid down in Article 106(2) TFEU. The French authorities take the view that La Rochelle airport as a whole could be considered an SGEI since its key tasks are to ensure that the area it serves is accessible and to enable economic and social development and encourage tourism.

(199)

In the further alternative, France argues that the infrastructure aid is compatible with the internal market under the 2005 Guidelines.

(200)

First, France considers that aircraft firefighting and wildlife hazard prevention services are tasks within the remit of a public authority that are essential for airport safety and that they should therefore be excluded from the scope of the Commission’s investigation concerning La Rochelle airport.

(201)

France also states that the financing granted to La Rochelle airport is not liable to affect competition within the meaning of Article 107(1) TFEU and thus the measures assessed do not constitute State aid.

(202)

In the alternative, France considers that, if the Commission were to consider that the measures under investigation constituted State aid, it ought to consider them compatible with the internal market in the light of the 2014 Guidelines.

(203)

France notes that the discount scheme that applied to Jet2, Flybe and Aer Arann was degressive, time-limited and applied to any airline that met the conditions set out in the CCI’s charges decision of 27 March 2008, which established the scheme.

(204)

According to France, this type of discount, which is accessible to all and granted for a limited period, does not constitute aid within the meaning of Article 107(1) TFEU, since the measure is not selective and does not affect competition.

(205)

France notes the need for growing regional airports to promote their services and their region via marketing campaigns in order to increase their passenger numbers.

(206)

Furthermore, France notes that, in accordance with Commission practice, if a service is paid for at market price, there can be no finding of State aid.

(207)

France stresses the complex nature of assessing the market price of marketing services, which must take into account the exact nature of the service provided, arrangements for oversight, its influence on traffic and the benefits generated. The French authorities would like these practices to be subject to a comprehensive assessment, so as not to disadvantage certain airports compared with others.

(208)

The French authorities share the Commission’s opinion, set out in recitals 205 and 214 of the opening decision, concerning the need for a joint assessment of the airport services agreements and the marketing services agreements, as well as for a joint approach to the various public authorities and the CCI with regard to the financing of marketing services agreements.

(209)

France considers that it is not in a position to prove that the marketing agreements concluded with Ryanair/AMS comply with the private investor in a market economy principle, since this principle excludes any regional development considerations, whereas the decision by the various local and regional authorities to participate in financing those agreements was based on regional development considerations. Moreover, France considers that the private investor in a market economy test is not well suited to airports with fewer than 1 million passengers per year, which need to consider aspects other than their own profitability.

(210)

France stresses the positive impact of the airport’s activities on regional development and therefore considers it natural that the local and regional authorities, which strive to develop the economy and tourism in their territory, use services allowing them to promote it and to attract visitors.

(211)

France notes the economic benefits generated by the airport. For example, in 2010, passengers using low-cost airlines to fly into La Rochelle airport spent around EUR 30 million.

(212)

As for the CCI, the French authorities give the following justification for the use of marketing services: ‘as regards the considerations which led the CCI to conclude the agreements under investigation, the possibility of placing advertisements about La Rochelle airport and its region, as well as all destinations served by the airport, on a website with as many visitors as Ryanair’s represented an opportunity to attract additional customers which the CCI, wishing to increase the airport’s traffic and therefore revenues, naturally seized’. France adds that ‘from the point of view of La Rochelle airport, its marketing support strategy has borne fruit since it has resulted in a sharp increase in the number of passengers over the period, leading to a steady increase in airport charges and in non-aeronautical revenues ...’.

(213)

As for the amounts paid to Jet2 for marketing services, the French authorities apply the same reasoning as that set out above with respect to Ryanair/AMS.

(214)

France also points out that, contrary to the information contained in the CRC report from 2008 and included in recital 39 of the Commission’s opening decision, easyJet did not receive any financing for marketing or advertising services.

(215)

In this part the Commission will assess the various financial support measures granted to the airport, as described in Section 3.1.

(216)

Under Article 107(1) TFEU, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods, in so far as it affects trade between Member States, is incompatible with the Treaty.

(217)

For a measure to be classed as State aid, therefore, all of the following criteria have to be met:

(218)

As the Commission reiterated in the 2014 Guidelines (41), from the date of the judgment in Aéroports de Paris (12 December 2000) (42), the operation and construction of airport infrastructure must be considered as falling within the ambit of State aid control. Conversely, due to the uncertainty that existed prior to that date, public authorities could legitimately consider at the time that the financing of airport infrastructure did not constitute State aid and, accordingly, that such measures did not need to be notified to the Commission. It follows that the Commission cannot now bring into question, on the basis of State aid rules, financing measures granted before 12 December 2000.

(219)

In the present case, the investment grants were made after 12 December 2000, as was the potential operating aid, the examination of which covers the period from 1 January 2001. The French authorities cannot therefore rely on legal uncertainty when it comes to classifying La Rochelle airport’s activity as non-economic, since the measures at issue were taken after 12 December 2000.

(220)

That being said, as also pointed out in the 2014 Guidelines, not all the activities of an airport are necessarily of an economic nature (43). Activities that normally fall under the responsibility of the State in the exercise of its official powers as a public authority are not of an economic nature and in general do not fall within the scope of the rules on State aid.

(221)

The investment grants made in 2001 and 2005 (see Table 8) were used in particular to finance investments relating to the departure and arrival hall, runway, taxiway and aircraft stands. This infrastructure and equipment is commercially operated by the CCI, which is the airport operator and which charges users for the cost of these assets. These investments are therefore intrinsic to the airport’s commercial activity. The investment grants made between 2001 and 2005 were thus to the benefit of economic activities.

(222)

With regard to the concepts of undertaking and economic activity, the financing of this airport infrastructure and the potential operating aid therefore served primarily to finance the economic activity of the commercial operation of the airport engaged in by the CCI and therefore fall within the scope of the rules on State aid.

(223)

As shown in Table 4, the formal investigation procedure covers subsidies (in particular from the FIATA) which financed various security-related investments, namely facilities and devices for screening hold baggage, access control to the restricted area, and screening of persons and cabin baggage. The investments also aimed to increase safety, as vehicles were purchased for the aircraft fire and safety service. These various subsidies were granted under the general system for financing public-remit tasks in French airports, described in recitals 32 et seq.

(224)

As pointed out by the Commission in the 2014 Guidelines, the Court of Justice has held that activities that normally fall under the responsibility of the State in the exercise of its official powers as a public authority are not of an economic nature and in general do not fall within the scope of the rules on State aid (44). According to the 2014 Guidelines, activities such as air traffic control, police, customs, aircraft firefighting, activities necessary to safeguard civil aviation against acts of unlawful interference and the investments relating to the infrastructure and equipment necessary to perform those activities are considered in general to be of a non-economic nature (45).

(225)

The 2014 Guidelines also state that, in order not to be classed as State aid, the public funding of such non-economic activities should be strictly limited to compensating the costs to which they give rise and must not lead to undue discrimination between airports. The Guidelines specify with regard to this second condition that, when it is normal under a given legal order that civil airports have to bear certain costs inherent to their operation, whereas other civil airports do not, the latter might be granted an advantage, regardless of whether or not those costs relate to an activity which in general is considered to be of a non-economic nature (46).

(226)

The activities financed by the general system for financing public-remit tasks in French airports, as described in recitals 32 et seq., relate to safeguarding civil aviation against acts of unlawful interference (47), police tasks (48), aircraft rescue and firefighting (49), air traffic safety (50), and the protection of the natural and human environment (51). These activities can legitimately be regarded as falling under the responsibility of the State in the exercise of its official powers as a public authority. Consequently, France may legitimately regard these tasks as ‘falling under the public remit’, in other words as non-economic, under the rules on State aid. It may therefore provide for public financing to compensate the costs incurred by airport operators in carrying out these tasks in so far as these are entrusted to them by national law and provided that this financing does not give rise to overcompensation or discrimination between airports.

(227)

It is clear from the description in recitals 32 et seq. that the system laid down by French law is based on strict cost control mechanisms, both ex ante and ex post, ensuring that airport operators receive, through the airport tax and additional financing instrument, only those amounts strictly needed to cover the costs.

(228)

Moreover, since this system applies to all French civil airports in terms of both the types of task giving rise to compensation and the financing mechanisms, the non-discrimination condition is met. While French legislation entrusts the performance of public-remit tasks to airport managers, it lays the responsibility for financing these tasks on the State, not the airport managers. Thus, the compensation from public funds for the costs of performing these tasks does not result in mitigating costs that should normally by borne by airport managers under the French legal system.

(229)

This national system has applied to La Rochelle airport since the beginning of the period under investigation. As a result, the financing received under this system does not constitute State aid in favour of the airport.

(230)

The following local authorities and public authorities have granted subsidies to the operator of La Rochelle airport: the French State, the Region of Poitou-Charentes, the Department of Charente-Maritime, the Communauté d’agglomération de La Rochelle and La Rochelle CCI’s general arm.