E.CA Compact

Are EC State aid rules compatible with attracting airlines through rebates?

Operating an airport profitably means generating sufficient traffic to cover operation costs at a margin which allows recovering fixed costs in the long run. Thus, airports often incentivise the opening of new routes or the establishing of hub status by individual airlines through rebate schemes. State-owned airports face the challenge to self-assess whether those rebates are in compliance with EC State aid rules. This note illustrates a simple but robust technique for such a self-assessment.

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Keywords: rebates, state aid