Flughafen Berlin Brandenburg receives US$1.9bn for recapitalization

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The European Commission (EC) has granted approximately €1.7bn (US$1.9bn) for the recapitalization of Flughafen Berlin Brandenburg (FBB), the state-owned operator of Berlin Brandenburg Airport (BER) in Germany.

Due to the Covid-19 outbreak and the travel restrictions that Germany and other countries imposed to limit the spread of the virus, FBB suffered substantial losses while still facing significant operational costs. As a result, the equity and liquidity position of the company deteriorated. The measure aims to help with these issues while maintaining the necessary safeguards to limit competition distortions.

In this context, Germany asked the EC, under the Temporary Framework, to grant up to €1.7bn (US$1.9bn) for the recapitalization of FBB by enabling its public shareholders, the Länder Berlin and Brandenburg and the Federal Republic of Germany, to inject the capital into FBB’s capital reserve. FBB will use part of the aid to repay the subsidized interest loans granted under a previous scheme approved by the EC in August 2020.

The measure was approved under the State Aid Temporary Framework. Margrethe Vestager, the executive vice president of the State Aid Temporary Framework, is in charge of competition policy. She said, “Airports have been hit particularly hard by the coronavirus outbreak and the travel restrictions in place. With this measure, Germany will contribute to reinforcing Flughafen Berlin Brandenburg’s equity position and help the company face the economic effects of the outbreak. At the same time, public support will come with strings attached to limit undue distortions of competition. We continue working in close cooperation with member states to ensure that national support measures can be put in place as quickly and effectively as possible, in line with the European Union (EU) rules.”

Until at least 75% of the recapitalization is redeemed, FBB will be subject to strict limitations regarding the remuneration of its management, including a ban on bonus payments. It will also be prevented from acquiring a stake of more than 10% in competitors or other operators in the same line of business. Furthermore, to preserve effective competition, FBB is required to not offer any discounts to airlines and not expand its capacity until the aid has been fully redeemed. This is to ensure that FBB does not unduly benefit from the state’s recapitalization aid to the detriment of fair competition in the market.

FBB will also have to publish information on the use of the aid received and on how it supports activities in line with EU and national obligations linked to the green and digital transition.

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