EU ANTITRUST: HOT TOPICS & NEXT STEPS

Prague, Czechia

EU ANTITRUST: HOT TOPICS & NEXT STEPS 2022

a new PSO as emergency measure) which do not enable the Member States to entrust the air carrier in the event of long-lasting extraordinary circumstances, such as the COVID-19 pandemic. Such new entitlement would be useful not only in case of the current COVID-19 pandemic, but also in cases of other, similar long-lasting extraordinary circumstances which may severally affect operation of air services in the EU. 3.2 Requirement of assessment of PSO under state aid rules Finally, it should be borne in mind that although the above-mentioned regulation of SGEI constitutes a special regulation for the entrustment of service operators and related tendering in the field of air transport, compensation is usually provided to the entrusted air carrier in connection with discharging the PSO. Since such compensation will come from the Member State, resp. its resources, the entrusting body will need to assess, regardless of the above, if such compensation does not constitute an unlawful state aid under Article 107(1) TFEU. And if so, whether the state aid may not be exempted from the ban on granting state aid either based on specific exemptions related to performance of SGEIs (in particular, Article 106(2) TFEU, conditions set out in the so-called “Altmark package”), or general exemptions related to any state aid (in particular block exemptions or exemptions contained in Article 107(2) and (3) TFEU). If the compensation constituted state aid and there would be no ground for its exemption, the Member State could not provide the air carrier with the respective compensation and any compensation paid to the air carrier in breach thereof would have to be recovered by the Member State. 4. Conclusion COVID-19 pandemic has clearly had and will continue to have a huge impact on air transport, resulting in the fact that many air carriers will either disappear or will not be able or willing to provide air services on some air routes, in particular those without economic potential. Thus, the operation of such economically unattractive routes which are important for the population and Member State’s ensuring of a certain level of connectivity and serviceability may be required more than before. In this case of market failure, a Member State may entrust an air carrier with operation of air services as a SGEI (under PSO). However, since the entrustment leads to restriction of competition on the market, it may be only realized in accordance with strict conditions laid down in Air Services Regulation. These conditions apply to any imposition of PSOs, regardless of whether the air carrier is entrusted with the PSO under normal or extraordinary circumstances. Thereby, making it difficult for Member States to impose PSOs in case of unexpected events which may require prompt action. And although the Air

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