View Full Version : Spanair will get more public money... again
The local Government of Catalonia remains committed to rescuing Spanair and has just decided to provide the airline with another injection of money, this time amounting to 20 million euros. This decision has been made on the ground that the airline wants to convert Barcelona's El Prat airport to an international hub.
The financial operation will be implemented through a capital increase of the public company Cimalsa (Centrals i Infrastructures Mobilitat i per a les Activitats Logistique) that will transfer the money through Consortium of Investors (IEASA), which owns 80.1% of Spanair.
With this new intervention, the Generalitat of Catalonia will have provided 60 million euros to the company, either directly or by credit from the Institut Català de Finances, since the purchase of JK from SAS group last year.
This move, made just three weeks before the local elections, could spark vigorous protests among other airlines present at El Prat, operating more successfully either without or with less public support involved.
...and here is the reaction of ELFAA (http://www.elfaa.com/101115_ELFAA_PressRelease_Spanair_StateAid.pdf) (not unexpected of course):
15 November 2010, Brussels – The European Low Fares Airline Association (ELFAA) sent a strongly-worded letter to the European Commission last Friday calling on it to carry out an urgent and full investigation into unfair and illegal state aid infringements in the airline sector.
“We believe that the recent unchecked infusions of funding to airlines in Europe represent flagrant breaches of European legislation with respect to competition and state aid,” said ELFAA Secretary General John Hanlon.
“This continuing use of taxpayers’ money to bail out ailing airlines places an unfair burden on competitors and is an irresponsible use of government funds, particularly in these times of fiscal austerity. It cannot be allowed to continue.”
The latest case concerns the decision by Spain’s Generalitat Executive Council (Cabinet) at its meeting of 2 November to authorise the Public Infrastructures Corporation (CIMALSA) to take a €20 million stake in Spanair.
This makes the Generalitat the airline’s main shareholder and ensures that Spanair becomes a state-controlled company in all but name.
“ELFAA views this latest development in Spain as being in blatant violation of European competition legislation and state aid rules,” continued Mr Hanlon.
“We urge the Commission to act swiftly to rectify this clear infringement of Community law and we will continue to remind it of its obligations to hold up European rules as long as such instances continue to go unchecked.”
cyflyer
21st Nov 2010, 06:18
“We urge the Commission to act swiftly to rectify this clear infringement of Community law and we will continue to remind it of its obligations to hold up European rules as long as such instances continue to go unchecked.”
Do we know what the European Commission can, and does, in these cases ? There must be many such cases in Europe lately. I am thinking of the case earlier in the year whereby the Cyprus government injected 35,000,000 Euros into state owned Eurocypria (which actually went straight to the banks and not to the airline itself) , but then when they wanted to absorb the Eurocypria staff into , also state owned, Cyprus Airways, they quoted EC rules that didn't allow that. Convenient and selective observation of rules ?
Indeed, you can find many examples of EU-blessed state support, the most recent one coming from Malta (http://www.reuters.com/article/idUSBRQ01001820101115). Also in that case any objections (http://www.timesofmalta.com/articles/view/20101121/local/minister-not-surprised-by-objection-to-air-malta-loan) will likely have no influence on implementation of this arrangement.
Do we know what the European Commission can, and does, in these cases ?
If a UK carrier, immediate court action.
If from elsewhere in Europe, press releases, bluster, and no action.
RoyHudd
21st Nov 2010, 22:44
Corrupt. Just as the European Parliament and its parasites are.
keltic
30th Nov 2010, 16:50
I find absolutely unfair calling corrupt the EU parliament as there are many decent and valuable MPs as in any place in the world.
As far as Spanair is concerned, they are not the ones receiving the biggest amount of subsidies but Vueling, Iberia and Air Nostrum (Iberia Regional). It´s interesting how Vueling, which sacks permantly most of the Regional goverments here in Spain, asks for stopping public money into Spanair. It´s like a prostitute sueing a Nun for indecency.:eek:
DC9gti
3rd Dec 2010, 14:16
Doesn´t Ryanair do the same thing?