The EFTA Surveillance Authority clears Covid-19 compensation to two Norwegian airports

In the recent Haugesund Airport and TORP Sandefjord Airport cases the EFTA Surveillance Authority (ESA) has cleared Covid-19 compensation measures granted by Norway authorities to the airports of Haugensund and Sandefjord on the legal basis of Article 61(2)(b) of the EEA Agreement. Alike Article 107(2)(b) TFEU, Article 61(2)(b) allows ‘…aid to make good the damage caused by natural disasters or exceptional occurrences…’.

The Norwegian authorities made grant in the form of the payment of a lump sum of NOK 90 million and NOK 56,8 million to the operators of the airports of Haugesund and Sandefjord, respectively. The ESA considered the grants as state aid but it authorizes them because they met all the compatibility conditions set out in Article 61(2)(b) of the EEA Agreement.

 

i) Exceptional circumstance

The ESA qualified the Covid-19 outbreak as an exceptional occurrence because it was not foreseeable and is clearly distinguishable from ordinary events, falling outside the normal working of the market.

 

ii)Causal link between the exceptional occurrence and the measure

The travel restrictions and the other containment measures imposed by Norway to mitigate the Covid-19 outbreak heavily impacted the beneficiaries, leading to a considerable reduction of flights. Hence, there was a direct causal link between the damage suffered by aid beneficiaries during the March 2020-December 2020 period and the Covid-19 outbreak.

 

iii) Proportionality

With the Covid-19 crisis still ongoing, the Norwegian authorities were only capable to estimate the damage suffered by the beneficiaries on the basis of the methodology according to which the damage consisted of the loss of added value. Such loss was calculated by the Norwegian authorities comparing the operating results of the beneficiaries during the compensation period affected by the health crisis with the operating results reached in the previous reference period. The damage was quantified having regard to loss of revenue; additional and avoided costs; and loss of profit. That way, the damage suffered by the Sandefjord airport was estimated in NOK 134 million corresponding to 66,9% of the granted aid. The aid granted to the airport of Haugensund covered 100% of the estimated damage.

Finally, the Norwegian authorities committed to make an ex post assessment of the damage suffered by the beneficiaries and have it audited by an independent body. Curiously, a clawback obligation for the repayment of overcompensation was given by the Norwegian authorities only in relation to the aid granted to the Sandefjord airport.  

That said, the ESA was satisfied that the aid granted to the airports will not overcompensate the beneficiaries for the damage suffered due to the Covid-19 and declared the grants compatible with the EEA agreement.

  

Beneficiaries

Measures

Aid Intensity

Legal Basis

Compatibility Conditions

Haugeund Airport

NOK 56,8 million grant

100%

Article 61(2)(b) of EEA Agreement, corresponding to Article 107 (2)(b) of TFEU

Covid-19 is an exceptional occurrence

Direct link between the Covid-19 and the damage suffered by beneficiaries

Proportionality of aid to damage: damage is the loss of added value emerging from comparison of operating results of airports in the compensation period and the reference period

Torp-Sandefjord Airport

NOK 90 million grant

67%

 

 

 


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