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

38 6.3. Aid Approved under Article 107(3)(c) TFEU Article 107(3)(c) TFEU has also been used by the Commission in some cases to approve aid to businesses whose issues were at least partly caused by COVID-19 measures. Article 107(3)(c) allows the Commission to authorise aid “to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest”. As this legal basis is used to address market failures and not to handle crises, it has only been invoked four times 153 by the Commission so far in COVID-19 related cases. For industries with tourism relevance, this legal basis was applied to authorise rescue and restructuring aid to two airlines. 154 Rescue and restructuring aid, approved by the Commission on the basis of Article 107(3)(c) and the Rescue and Restructuring Guidelines, is an exceptional aid category that can be used to save undertakings in difficulty. In the case of the two (Portuguese) airlines, TAP and SATA, the Commission authorised temporary rescue aid because the airlines (as opposed to airBaltic) had been in difficulty already before the pandemic, which excluded the application of the relevant aid categories of the Temporary Framework (which is only available to large companies if they were not in difficulty at the end of 2019). Nevertheless, the Commission approved rescue aid (a EUR 1.2 billion loan to TAP and a EUR 133 million public guarantee on a loan to SATA), for six months, on condition that the aid must be repaid or a restructuring plan must be submitted to the Commission before the expiry of that period. In both cases, the beneficiaries’ COVID-19 related issues were mentioned in (and thus factored in) the positive decision of the Commission. Although not COVID-19 relevant, for a full picture, it should be mentioned that in the case of SATA the Commission, while authorising the rescue aid, it also initiated a formal investigation into 2017, i.e. pre-pandemic, capital increases, suspecting that they might have involved State aid. 153 Source: https://ec.europa.eu/competition/state_aid/what_is_new/State_aid_decisions_TF_and_107_2b_107_3b _107_3c.pdf ( accessed on 5 March 2020). 154 Commission decision C(2020) 5764 final of 18 August 2020 (SA.58101 (2020/N) Rescue aid to SATA Group) and Commission decision C(2020) 3989 final of 10 June 2020 (SA.57369 (2020/ N) Aid to TAP). In the case of SATA, the aid was partly authorised on the basis of Article 106(2) TFEU due to SATA’s SGEI mandate of connectivity services for the Azores.