Brussels considers aid for Azores airline illegal

By TPN/Lusa, in Regional · 13-12-2020 16:00:00 · 0 Comments
Brussels considers aid for Azores airline illegal

The European Commission has found that the capital increases made to the Azores carrier SATA were illegal and the company has to return €73 million to the region, the Azorean government's secretary of finance announced.

During the debate on the Government Programme, taking place in the Azorean Parliament in Horta, Bastos e Silva indicated that the three grants investigated by Brussels, worth €73 million, had been considered "illegal public aid" because they "did not obtain prior authorisation" from the European Commission.

SATA, he said, "must return that amount to the region", and without that process being completed it will not be able to move the carrier towards restructuring, a process which, Bastos e Silva acknowledged, would be "tough".

"The decision has been transmitted very clearly, in a way that would allow a solution to be built that would not drag the company into bankruptcy", continued the ruler, adding that negotiations are continuing with the Community executive on the matter.

The European Commission's decision was communicated to the executive on 4 December, he added.

The regional secretary argued that "it would have been democratically essential to know Brussels decision before the elections on 25 October" in the archipelago, so that the "wrong political and managerial acts carried out in the past had been democratically judged".

He went on to say: "It is, however, an expression in this Parliament of the vehement censorship of the way in which the company has been run in recent years, with incompetence, recklessness, in a word, irresponsibility".

The leader of the PS/Açores and former head of the Regional Government, Vasco Cordeiro, asked the regional secretary if he could make the decision available to the parliamentarians, saying that Bastos e Silva gave in to the "temptation" of keeping the decision for a few days to announce it only on 9 December.

In mid-August, the European Commission gave the 'green light' for Portuguese state aid of €133 million to the Azorean airline SATA, but opened an investigation to assess compliance with EU rules in three public supports to the company.

SATA's financial difficulties have persisted since at least 2014, when the airline wholly owned by the regional government of the Azores began to make losses, which were aggravated by the Covid-19 pandemic.

It was because of these difficulties that the Autonomous Region of the Azores approved three capital increases in the airline since 2017, in order to make up for liquidity shortfalls.

It is this public support that Brussels has investigated and defined as illegal, the regional secretary of the new Azorean executive responsible for finance said.


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