The European Commission has approved the plan of Latvia to grant a maximum of €39.7 million for the recapitalization of the Riga International Airport.

“Airports are among the companies that have been hit particularly hard by the coronavirus outbreak. With this measure, Latvia will contribute up to €39.7 million to reinforce Riga International Airport’s equity and support the company faces the economic effects of the outbreak. At the same time, the State aid will come with strings attached to limit undue distortions of competition,” Executive Vice-President Margrethe Vestager said.

He added that they would keep working closely with the Member States to make sure that national support actions will be effectively coordinated with the EU rules, StudyinPoland.Info reports.

Riga International Airport is a corporation completely owned by Latvia. Its main operation is to offer aviation services, but it also offers non-aviation services. Riga International Airport experienced significant losses due to COVID-19 and travel restrictions. Consequently, the airport is risking its survival.

The Latvian State, under the Temporary Framework, informed the Commission that the measures supporting the Riga International Airport for up to €39.7 million, comprising €35.2 million capital contribution and €4.5 million for the 2019 financial year are in their favor.

According to a press release issued by the European Commission, it was revealed that the measures reported by Latvia are in concordance with the set conditions and the Article 107 (3)(b) TFEU, as follows:

• Conditions based on the need, suitability, and extent of intervention: the measures will be just enough to guarantee the viability of Riga International Airport. They will not be destined to help the capital position prior to the Coronavirus outbreak.
• Conditions on the State’s entry, compensation, and the motive to exit from the capital of the company: the aid for recapitalization will support the viability of Riga International Airport, whose collapse would affect the Latvian economy and employment.
• Conditions regarding governance: the Riga International Airport is to ban dividing and sharing repurchases until the State exited utterly. Also, the airport is to ban bonus payments in order to exit the State as soon as the economy is significantly improved.
• Acquisition ban: Riga International Airport avoided obtaining more than ten percent stake in other companies or competitors.
• Public openness and reporting: the airport will have to make the information public on how the aid that was received will benefit the company’s activities in conformity with EU and other national obligations.

In December, the European Commission approved €650 million aid dedicated to LOT Polish Airlines, a major network airline in Poland and Central Europe based in Warsaw.

Lately, the European Commission has approved Italy’s €73 million support for Alitalia to help the airline with the damages between June 16 and October 31 in 2020 due to the emergency measures imposed to prevent the spread of the virus.