The European Commission (EC) has found public support by the Land of Rhineland-Palatinate to loss-making Frankfurt-Hahn Airport in Germany to be in line with European Union state aid rules.
This the EC says ensures the gateway can continue to serve the area’s transport needs until private investment enables its return to viability.
Since 2009, Frankfurt-Hahn has been controlled by the Land of Rhineland-Palatinate, which on 1 March 2017 signed a share purchase agreement with the Chinese HNA Group for the sale of its 82.5m per cent of shares in the airport.
The EC says the approved measure aims to cover the airport’s expected operating losses over the period 2017-2021 up to a maximum amount of €25.3 million. If, however, the operating losses turn out to be lower than that amount, less state aid will be paid out.
According to the Commission’s 2014 Aviation Guidelines public funding is allowed to cover the operating losses of smaller regional airports until 2024 under certain conditions. One of these conditions is that a credible business plan is presented, which demonstrates the return of the airport to viability at the latest by April 2024.
In its assessment, the EC found public funding will cover the operating losses whilst HNA Group makes the necessary private investment to enable the airport’s return to viability, which is due in 2023.
The EC says it also took into account Frankfurt-Hahn Airport is located in the Rhine-Hunsrück district, economically weaker area within Germany, and is important for the local economy. According to Rhineland-Palatinate authorities, the airport is responsible for providing around 11,000 jobs in the region.
Furthermore, the EC notes there are no other gateways located in a radius of 100 km, or one hour’s traveling time, around the airport, which reduces the potential negative effects of the support on competition and trade.
In 2016, Frankfurt-Hahn handled 72,600 tonnes of cargo, and in the first half of 2017, it saw a strong increase recording record growth of more than 50 per cent, handling 49,000 tonnes. In June alone, the airport reports 8,670 tonnes, a rise of 101 per cent compared to June 2016.