The European Commission (EC) has approved a French scheme allowing airlines to defer the payment of some taxes to help them weather the COVID-19 crisis by reducing pressure on their cash flows.
The EC said the French scheme is in line with European Union state aid rules. The plan will allow for the deferral of some taxes for the aviation sector, with the aim of compensating airlines for the damage the coronavirus outbreak has caused them and reducing pressure on their cash flows.
The scheme will be accessible to airlines with an operating license in France and will offer them the possibility to defer the payment of certain taxes that would in principle be due between March and December 2020 to after January 1 2021, and to pay the taxes over a period of up to 24 months.
The EC considers that the coronavirus outbreak qualifies as an exceptional occurrence, as it is an extraordinary, unforeseeable event having a significant economic impact and as a result, exceptional interventions by member states to compensate for the damages linked to the outbreak are justified, the EC said.
“The Commission found that the French aid scheme will compensate damages that are directly linked to the coronavirus outbreak,” it said. “In this respect, the scheme will contribute to address the economic damage caused by the coronavirus in France. It also found that the measure is proportionate as the foreseen compensation does not exceed what is necessary to make good the damage.