European Commission approves €300 million Austrian scheme for package travel organisers and facilitators of linked travel services in the context of the coronavirus outbreak

The European Commission has approved, under EU State aid rules, a €300 million Austrian scheme for package travel organisers and facilitators of linked travel services in the context of the coronavirus outbreak.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “The package travel industry has been hit hard by the coronavirus outbreak, due to restrictions on international travel that Austria and other countries had to impose to limit the spread of the virus. This €300 million aid scheme will enable Austria to ensure that, should package travel organisers become insolvent, sufficient resources are available to refund consumers for travel services cancelled due to the coronavirus. We continue working closely with Member States to ensure that national support measures can be put in place in a coordinated and effective manner, in line with EU rules.”

The Austrian support measure

Austria notified to the Commission a €300 million State guarantee scheme to ensure that sufficient resources are available to refund consumers for cancelled travel services should package travel organisers or facilitators of linked travel services become insolvent.

Under Austrian law, implementing the Package Travel Directive, package travel organisers and facilitators of linked travel services are required, by means of appropriate insurance, to ensure that travellers will be reimbursed for sums they have already paid (such as advance payments and residual payments) for services which were not ultimately provided, either fully or in part, including in the case of insolvency of the organiser.

Under the scheme notified by Austria, the aid will take form of State guarantees, which will cover 100% of the beneficiaries’ liability for travel services which could not be provided in full or in part due to the coronavirus outbreak, in the specific instance in which the beneficiaries become insolvent.

The Commission assessed the measure under EU State aid rules, and in particular Article 107(3)(b) of the Treaty on the Functioning of the European Union (TFEU), which enables the Commission to approve State aid measures implemented by Member States to remedy a serious disturbance in the economy of a Member State.

The Commission found that the scheme notified by Austria is compatible with the principles set out in the EU Treaty and is well targeted to remedy a serious disturbance to the Austrian economy. In particular, (i) the guarantee fee premiums are in line with those set in the Temporary Framework; (ii) the guarantees are limited in time: they will be granted by 30 June 2021 at the latest and will cover the risk of insolvency of the beneficiaries until 31 December 2021; and (iii) the duration of the guarantees is one year.

The Commission concluded that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the Austrian economy, in line with Article 107(3)(b) TFEU and the general principles set out in the Temporary Framework.

On this basis, the Commission approved the measure under EU State aid rules.

Comments are closed.