Unequal, discriminatory treatment of TAP in respect of other airlines (II)

Unequal, discriminatory treatment of TAP in respect of other airlines (II)

On 12 October 2020, Portuguese Member of the European Parliament João Ferreira of The Left group in the European Parliament – GUE/NGL posed a written parliamentary question to the European Commission:

“In its answer to question E-004137/2020 on the ‘Unequal, discriminatory treatment of TAP in respect of other airlines’, the Commission claims that ‘TAP qualified as an undertaking in difficulty at the end of 2019 and was, therefore, not eligible for aid under the Temporary Framework’. Yet TAP, like other companies, has suffered – and continues to suffer – specific, concrete, established and calculable losses that can be undeniably traced back to the pandemic and no other cause. Therefore, if TAP does find itself denied access to aid under the temporary framework, this will place the airline at an obvious disadvantage with respect to its competitors. In other words, in imposing this discriminatory treatment, the Commission itself would be unacceptably distorting competition against TAP.

In its answer, the Commission says nothing about whether it has attempted to impose job losses on TAP through its restructuring plan.

I would like to ask the Commission the following:

1. Is it willing to reconsider its decision concerning TAP’s (complete or partial) ineligibility for state aid under the temporary framework, in order to avoid discriminating against the company and distorting competition with respect to other airlines which stand to benefit?

2. Whatever its assessment of the restructuring plan, can it confirm that this does not necessarily need to involve job losses?”

On 20 January 2021, Executive Vice-President Vestager responded on behalf of the European Commission stating: “on 9 June 2020, the Commission approved EUR 1.2 billion rescue aid in favour of TAP SGPS, under the relevant EU State aid rules. The measure provided TAP with the necessary resources to address its immediate liquidity needs, without unduly distorting competition in the Single Market.

The main purpose of the state aid Temporary Framework adopted on 19 March 2020, as amended, is to provide targeted support to otherwise viable companies that have entered into financial difficulty as a result of the coronavirus outbreak.

Therefore, companies that were already in difficulty before 31 December 2019 (except small and micro companies that face specific challenges) are not eligible for aid under the Temporary Framework, but may benefit from aid under existing state aid rules, in particular the Rescue and Restructuring Guidelines. These Guidelines set clear conditions according to which such companies must define sound restructuring plans that will allow them to achieve long-term viability.

It is for the Member State to draw up and notify to the Commission a restructuring plan putting the beneficiary back to sound financial and operational conditions, supported also with a fair contribution of the beneficiary or investors to covering the restructuring costs, the nature of which vary from one case to another.

Similarly, it is for the Member State to determine the conditions and actions necessary to restore the long-term viability of the beneficiary and stand in the marketplace without the need for continued State support. The role of the Commission is limited to assessing that the plan meets the conditions set out in the applicable state aid rules.”

Source: https://www.europarl.europa.eu/doceo/document/E-9-2020-005573_EN.html

Photo Credit : https://pixabay.com/photos/lufthansa-aircraft-corona-crisis-5163695/

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