The European Commission has approved €12 million in Portuguese support in favour of SATA Air Açores - Sociedade Açoriana de Transportes Aéreos (SATA Air Açores) as compensation due to damages suffered as a direct result of travel restrictions imposed due to the coronavirus outbreak. Furthermore, it approved up to €255.5 million additional liquidity support to SATA Air Açores. At the same time, the Commission has extended the ongoing in-depth investigation into other support measures to assess whether Portugal's planned restructuring support measures in favour of SATA are in line with EU rules on State aid to companies in difficulty.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “The measures we have approved today, amounting to almost €270 million, will enable Portugal to provide immediate support to SATA Air Açores and Azores Airlines to ensure the continuity of air connections within and to the Azores, an outermost region of the EU. At the same time, we have extended the ongoing investigation into the compliance of past measures in favour of the airlines. We will continue to be in close contact with the Portuguese authorities in this context.”
The support will take the form of a €12 million direct grant. The measure provides that, following appropriate reporting by SATA to the Commission at the end of the financial year, any public support received by the beneficiaries in excess of the actual damage suffered will have to be returned to Portugal. The risk of overcompensation is therefore excluded.
Separately, Portugal notified the Commission of its intention to grant an additional €122.5 million in support to SATA, with the aim of providing the airlines with sufficient resources to address its urgent and immediate liquidity needs until the end of 21 November 2021, or until the Commission takes a final decision on the ongoing investigations. This follows the Commission's decision of 18 August 2020 approving, under EU State aid rules, €133 million in liquidity support to the SATA airlines.
Furthermore, Portugal notified the Commission of its intention to grant restructuring aid to support SATA's restructuring plan. This follows the adoption, also on 18 August 2020, of a Commission decision to open an in-depth investigation to assess whether certain past public support measures by Portugal in favour of SATA are in line with EU rules on State aid to companies in difficulty (under case number SA.58101).
At this stage, the Commission states that it “has doubts that the planned restructuring aid is in line with these rules”. In particular, the Commission has doubts on: the proportionality of the restructuring aid; the solidity of the assumptions under and the timespan of the restructuring plan; and compliance with the so-called “one time, last time” principle that companies in financial difficulty can receive restructuring aid only once over a period of 10 years.