The EFTA Surveillance Authority approves State aid scheme to the Icelandic airport

COVID-19 Pandemic: ESA approves ISK 15 billion in aid to Keflavík Airport*

The EFTA Surveillance Authority (ESA) has today approved an Icelandic measure that will offer damage compensation to Isavia, the operator of Keflavík Airport, by increasing its share capital.

Air travel has plummeted in Iceland following the introduction of containment measures and travel restrictions in response to the COVID-19 pandemic. The extended duration of the crisis and global decline in travel continues to have an adverse effect on the tourism sector in Iceland.

Isavia is responsible for the operation, maintenance, and development of Keflavík Airport. For a period, passenger traffic through the airport all but stopped, and it continues to be limited. No recovery is foreseen in the coming months.

The approved scheme will compensate Isavia for its financial losses due to COVID-19 from 1 March 2020 to 31 June 2021. The maximum budget of the aid is capped at ISK 15 billion (EUR 96.7 million). The aid will take the form of a share capital increase, in which Iceland will increase its funding of Isavia’s operations. The support will be injected in tranches during 2020 and 2021; the first installment was paid out in June 2020.

In 2021 and 2022, the Icelandic authorities will carry out an assessment of Isavia’s actual losses due to COVID-19. As a consequence, should public support exceed the losses, the difference will be repaid to the state.

Iceland notified the measure to ESA on 17 December 2020.

You can read ESA’s decision here.

*This is the original title of the press release. The title above has been amended in order to match the e-Competitions format. Individual authors are welcome to provide original independent commentaries on the case law. Articles are subject to approval by the Board of e-Competitions Bulletin before publication based on the Editorial Policy (click here).

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EFTA Surveillance Authority, The EFTA Surveillance Authority approves State aid scheme to the Icelandic airport, 18 December 2020, e-Competitions December 2020, Art. N° 98488

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