EC not aware of peripheral island's particular problems - Alfred Sant

Sant tells European Commission that "it was not sensible to let Cyprus Airways die and give the flight concessions it held to other companies which have wider interests than those of Cyprus," pointing out that similar arguments apply to Air Malta.

Former Prime Minister Alfred Sant has complained that EU policy based on the principles of unrestricted free trade denies the need to treat peripheral countries and small states differently.

Sant said that the European Commission is not sufficiently aware of how peripheral islands and regions are affected by their isolation or small size, opining that the operations of small airlines like Air Malta and Cyprus Airways do not affect the competitive situation in the EU. “The fact that Cyprus Airways only carried 12% of air traffic towards Cyprus is such a small volume that it certainly could not have affected the competitive situation in the EU”. He said that it was not sensible to let Cyprus Airways die and give the flight concessions it held to other companies which have wider interests than those of Cyprus. ‘Similar arguments apply, in my view, to Air Malta.’ said Sant.

His comments were made at the European Parliament after the European Commission had informed him  in a written reply that even without Cyprus Airways, Cyprus should remain connected to many international hubs.

Sant had asked the EC whether it should consider adopting more flexible methods when evaluating state aid and support to air and sea transport links comparable to those of Cyprus Airlines in the interests of ensuring that ongoing economic activity in peripheral island markets is maintained or even enhanced. Replying to the question, EU Competition Commissioner Margrethe Vestage said the Commission concluded its three formal investigations concerning the State aid provided to Cyprus Airways by issuing a final decision on 9 January 2015.

The Commission said it found that the aid provided to Cyprus Airways gave the company an undue advantage over its competitors in breach of EU State aid rules for rescue and restructuring aid and that Cyprus Airways therefore needs to pay back all incompatible aid received.

The EC said rescue and restructuring aid is particularly distortive and requires close scrutiny and strict conditionality and is therefore not appropriate for ensuring transport links to and from peripheral islands.

Member States wishing to ensure operation of air transport routes considered vital for economic and social development may use the possibility to establish public service obligations meeting the requirements of the EU's air services regulation.

As regards the consequences of the negative decision for Cyprus' connectivity, the Commission said Cyprus Airways' share of air traffic to and from Cyprus has been relatively limited in recent years -around 12% in 2014. Several other airline companies operate to and from Cyprus and therefore, even without Cyprus Airways, the island would remain connected to many international hubs. The EC added that several operators had, in fact, already publicly announced their intention to increase their activities in Cyprus.