EU orders recovery of 33.8 million in incompatible state aid to Blue Air

EU orders recovery of 338 million in incompatible state aid

(Finance) – The European Commission concluded that the Blue Air restructuring plan was unable to restore the airline’s long-term viability and is therefore incompatible with EU state aid rules. Romania must now recover Blue Air’s illegal state aid amounting to approximately €33.84 million (RON 163.8 million).

Blue Air crosses financial difficulties since 2019. In August 2020, the Commission approved two measures in favor of the airline: a public guarantee of around €28 million (around RON 137 million) to cover damage directly caused by the coronavirus; and a public guarantee of approximately €33.84 million (RON 163.8 million) on a rescue loan intended to partially cover Blue Air’s liquidity needs for the next six months.

Following the in-depth investigation opened in April 2023, the Commission concluded that the restructuring plan of Blue Air was not feasible, coherent and of sufficient scope to restore the long-term viability of the airline within a reasonable time frame and without unduly distorting competition in the sector. This was corroborated by Blue Air’s failure to maintain operations and its request in March 2023 to initiate insolvency proceedings.

“Public support for businesses in difficulty must be supported by achievable plans to ensure that restructuring is successful without unduly distorting competition – commented the Executive Vice President Margrethe Vestager, Head of Competition Policy – After an in-depth investigation, we have confirmed that the restructuring plan and the measures implemented for Blue Air are not in line with EU State aid rules. Romania must now recover the aid to restore competition in the internal market for air transport services.”