European Commission approves €16.3 million Swedish subsidised loan scheme to support air traffic control services affected by coronavirus outbreak

The European Commission has approved a SEK 164 million (approximately €16.3 million) Swedish scheme to support air traffic control services affected by the coronavirus outbreak. The scheme was approved under the State aid Temporary Framework.

In the context of the coronavirus outbreak, Sweden introduced restrictions to avoid the spread of the virus, which has caused dramatic drops in air travel. Specifically, in 2020, the number of air passengers in Sweden was 75% lower than in 2019.

The aim of the scheme is to cover the losses for the years 2020 and 2021 incurred by small and medium-sized companies active in air traffic management, which have suffered significant losses in revenues due to these drops in the number of flights performed. Under the scheme, the public support will take the form of loans provided by the Swedish National Transport Administration (‘Trafikverket’) with subsidised interest rates.

The Commission found that the Swedish scheme is in line with the conditions set out in the Temporary Framework. In particular, (i) the maturity of the loans is limited to six years, (ii) a 1% flat rate interest rate applies for the entire duration of the loans, (iii) the amount of the loans corresponds to the level foreseen in the Temporary Framework, (iv) the loans relate to working capital needs, and (v) the loan contracts will be signed by 31 December 2021 at the latest.

The Commission concluded that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions of the Temporary Framework.

On this basis, the Commission approved the measure under EU State aid rules.