IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
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Inception date: 02 Sep 2010 | Removal date: open ended
Still in force

Capital injection and equity stakes (including bailouts)

On 11 March 2011, the Slovenian authorities notified the European Commission of their intention to provide state in the form of guarantees and soft loans worth EUR 6.2 million to its national carrier Adria Airways. Furthermore, on 2 September 2010, the Slovenian authorities injected capital worth EUR 2 million through PDP, a state-owned holding company. Another state aid measure took place on 21 September 2011 when the Slovenian government injected EUR 49.5 million and PDP provided a further EUR 0.5 million to the Adria Airways.
 
The beneficiary plays a dominant role in the Slovenian air traffic, as it amounted to about 70% of the total passenger numbers in 2012. The company is owned at 69.9 by Slovenia, 19.6 by Nova Ljubljanska Banka and 2.1 by PDP. According to a letter from the EC to Slovenia, "Adria's financial situation has constantly deteriorated from 2008 onwards, having reduced sales, negative EBT (earnings before tax) and negative own equity" (para. 8, Brussels 20.11.2012). On 1 August 2012, the Slovenian government opened the privatization process to sell most of its shares of the company.
 
According to a statement by the Commission, the measures mentioned above "affect trade between Member States and competition as Adria competes with other EU airlines, in particular since the entry into force of the third stage of liberalisation of air transport ("third package") on 1 January 1993. In addition, for travels of relatively shorter distances within the EU, air travel is in competition with road and rail transport, and therefore road and rail carriers might also be affected." (para. 97)
 
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metric, the state aid proposed here is discriminatory.
 
The list of affected countries was gathered taking into account the competitors named by the Commission in paragraph 6 of the letter mentioned above. These airlines are Wizzair, Easyjet, Turkish Airlines, Finnair, Air France and Montenegro Airlines.
 
Update
On 9 July 2014, the European Commission announced that these capital increases do not constitute state aid within the meaning of the Treaty on the Functioning of the European Union. The Commission also argued that capital injection did constitute aid but it was compatible with EU law. 

AFFECTED COUNTRIES

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