Croatia to conclude aviation aid contracts
The Croatian government is set to distribute aid to the country’s aviation sector in the coming days after the European Commission gave its approval for the state to provide 45.4 million euros in the form of subsidised interest rates on loans. Both airports and airlines can benefit from the measure, but the funds will be limited to those located in Northern Croatia and the city of Zagreb. Final loan agreements must be concluded between the government and relevant stakeholders by the end of the month at the latest. “The measure is aimed at supporting the companies operating in the civil aviation sector so that they can preserve the continuity of their economic activity. The beneficiaries of the measure are large enterprises active in the civil aviation sector impacted by the Covid-19 pandemic. These include parties registered in Croatia to perform activities in the following sectors: passenger air transport, freight air transport and support activities for transport”, the Commission said.
Croatian authorities noted that the loan agreements will be accompanied by a security package which could include pledges on movable and fixed assets, company promissory notes and debenture bonds. “The objective of the measure is to provide immediate liquidity in the form of loans to undertakings operating in the civil aviation sector”, it noted. Under the terms of the financial assistance, a beneficiary may benefit in parallel from multiple support schemes, paving the way for Croatia Airlines, which had already received state aid to mitigate the impacts of the pandemic, to receive additional funds. Ryanair is still challenging an earlier eleven-million-euro cash injection into Croatia Airlines, which was approved by the Commission. The Croatian carrier’s Supervisory Board will today approve to carryforward the company’s 38-million-euro loss from 2021 into future years.
Once the contracts are finalised, the Croatian government must publish relevant information on each individual aid granted within twelve months from the moment of granting. In its conclusions on the matter, the European Commission noted, “The Commission therefore considers that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State since it meets all the relevant conditions. The Commission has accordingly decided not to raise objections to the aid on the grounds that it is compatible with the internal market of the Treaty on the Functioning of the European Union”.
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