State Aid: Commission opens in-depth investigation into Milan airport ground-handling services

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European Commission - IP/14/803   09/07/2014

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European Commission

Press release

Brussels, 9 July 2014

State Aid: Commission opens in-depth investigation into Milan airport ground-handling services

The European Commission has opened an in-depth investigation to examine whether a €25 million capital injection by SEA SpA, the publicly owned manager of the Italian airport Milan, in favour of its new ground-handling subsidiary Airport Handling was in line with EU state aid rules. The opening of an in-depth investigation gives interested third parties the opportunity to comment. It does not prejudge the outcome of the investigation.

The Commission will examine whether this capital injection is a circumvention of its December 2012 decision, which required the repayment of incompatible aid granted by SEA SpA to its then ground-handling subsidiary SEA Handling (see IP/12/1414). According to Italian authorities, there is no economic continuity between SEA Handling, which was wound up in June 2014, and Airport Handling, which started its operations on 1 July 2014. However, the Commission has concerns that the aim and result of creating the new company was to avoid repaying the incompatible state aid, since the scope of the transferred activities, the price of the transferred assets, the identity of shareholders and the timing and economic logic of the operation all seem to indicate that Airport Handling is in fact the successor of SEA Handling. Member States cannot circumvent Commission decisions ordering the recovery of incompatible state aid. Under EU rules, incompatible state aid granted to a company should be recovered from its successor. There must be genuine economic discontinuity between the two companies to avoid such an outcome.

The Commission will also assess whether the capital injection was carried out on market terms. Italian authorities argue that SEA SpA has acted as any private investor would have when injecting capital into Airport Handling, so this measure did not provide Airport Handling with an undue advantage and does not constitute state aid. At this stage the Commission has doubts that a market economy investor would have invested in a similar project given the possible transfer of the recovery obligation to Airport Handling and the lack of robustness of the projections made in the business plan underpinning SEA's capital injection. If these doubts were confirmed, the capital injection would amount to state aid in favour of Airport Handling.

The Commission will now investigate both aspects to verify whether its concerns are confirmed.

Background

In its decision of 19 December 2012, the Commission found that the aid granted by the publicly owned Milan airport manager, SEA, in favour of its fully-owned ground-handling subsidiary, SEA Handling, during the period 2002-2010, was incompatible with the Single Market and should be recovered (see IP/12/1414).

In November 2013, Italy informed the Commission of its plan to liquidate SEA Handling. According to this plan, SEA would set up a new ground handling provider at Milan airports, Airport Handling. Italy asked the Commission to confirm that:

(a) SEA Handling's liquidation involves no elements of economic continuity with Airport Handling;

(b) SEA's participation in Airport Handling capital does not qualify as state aid.

Italy has not yet demonstrated that it has complied with the 2012 decision and that SEA Handling has either reimbursed the incompatible aid or exited the market, in order to mitigate the distortion of competition brought about by the undue advantage it has received.

The non-confidential version of the decision will be made available under case number SA.21420 in the State Aid Register on the competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

News Source : State Aid: Commission opens in-depth investigation into Milan airport ground-handling services
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