European Commission approves around €350 million Finnish support to compensate Finnair for damages suffered due to coronavirus outbreak

The European Commission has found €351.38 million of Finnish support in favour of Finnair to be in line with EU State aid rules. The measure aims at compensating the airline for the damage suffered due to the coronavirus outbreak between 16 March and 31 December 2020.

Finland notified the Commission of an aid measure to compensate Finnair for damages suffered between 16 March 2020 and 31 December 2020 due to the travel restrictions necessary to limit the spread of the virus: (i) in the first compensation period, from 16 March to 30 June 2020, the notified measure will compensate Finnair for the overall loss of income caused by the travel restrictions imposed in Finland, EU and non-EU countries; (ii) in the second compensation period starting in July, given that many travel restrictions in the EU had already been lifted by then, the notified measure will compensate Finnair for the losses caused by remaining or new travel restrictions affecting specific routes. The support will take the form of a hybrid loan in the amount of €351.38 million.

The Commission assessed the measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union (TFEU), which enables the Commission to approve State aid measures granted by Member States to compensate specific companies or sectors for damage directly caused by exceptional occurrences.

The Commission considers that the coronavirus outbreak qualifies as such an exceptional occurrence, as it is an extraordinary, unforeseeable event having a significant economic impact. As a result, exceptional interventions by the Member State to compensate for the damages linked to the outbreak are justified. On this basis, the Commission concluded that the Finnish damage compensation measure is in line with EU State aid rules.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “The aviation sector has been particularly affected by the various travel restrictions imposed to contain the spread of the coronavirus. With the measure we approved today, Finland will compensate Finnair for damages directly suffered as a result of such restrictions.”