Options for Traffic Growth at Smaller European Airports Under the European Commission’s Guidelines on State Aid

Abstract

The European Commission will strongly cap state aid to airports from 2024, putting at risk many smaller airports failing to break even. Based on literature research and empirical cases, we assess public funding options to increase traffic and revenues of airports which are unlikely to infringe state aid rules. There is some cope to declare several airport functions as areas of non-economic nature, which would allow public bodies to take over costs without violating European state aid rules. In addition, boosting the number of air services operated as public service obligations and providing incentives may constitute legitimate options to improve airport financials. However, all forms of support described herein come at the taxpayers’ expense, though.