The Legal Impacts of COVID-19 in the Travel, Tourism and Hospitality Industry

20 issues, and thus might need equity to prevent their unnecessary exit from the market (airlines being a prime example). 67 The recapitalisation aid rules were also different in the sense that while the other aid categories of the Temporary Framework had simple and concise conditions, recapitalisation (equity and hybrid capital instruments offered by the State), a highly distortive form of aid, brought a stringent and detailed set of criteria regarding the entry, remuneration and timely exit of the State, governance of the undertaking and measures to limit distortions of competition. Importantly, recapitalisation aid was not available to undertakings that had already been in difficulty on 31 December 2019; those in financial difficulty before the pandemic could only be recapitalised through rescue and restructuring aid under Article 107(3)(c) TFEU. 68 On 13 May 2020, the Commission published a recommendation 69 with State aid considerations concerning the tourism industry. The recommendation did not introduce any new aid category, but addressed a specific problem from the aspect of EU law, including State aid. The recommendation focused on vouchers offered as an alternative means of compensation to travellers with cancelled trips. It argued that organisers have limited or no new business, and the reimbursement of cancelled packages would further aggravate their situation as they may not be able to recover the price of the services they booked. If their customers accepted vouchers for future trips instead of immediate cash reimbursement, it would provide them temporary relief and prevent bankruptcies. 70 Beyond describing the minimum criteria of these vouchers, the recommendation included possible State aid compliance bases for state measures to make these vouchers more attractive for customers. The recommendation specified guarantees and subsidised loans (Section 3.2 and 3.3 of the Temporary Framework) as possible forms of liquidity aid to travel organisers, and also mentioned that state authorities may also provide 100% guarantees of the value of vouchers, which is not possible under Section 3.2 of the Temporary Framework rules (90% is the ceiling), but can be approved directly under the 67 Point 4 of the second amendment. 68 Point 14 of the Temporary Framework. See the cases referred to in Chapter 6.3. 69 Commission Recommendation (EU) 2020/648 of 13 May 2020 on vouchers offered to passengers and travellers as an alternative to reimbursement for cancelled package travel and transport services in the context of the COVID-19 pandemic, OJ L 151, 14.5.2020 70 Recitals (14)-(15) of the Recommendation.