Operating aid to City of Derry Airport (Operations) Limited
State Aid registration under General Block Exemption (GBER)
This document sets out information relating to the operating aid provided to CODA (Operations) Limited by Derry City and Strabane District Council and how the State Aid granted complies with Chapter 1 and Article 56a of Commission Regulation (EU) 651/2014 of 17 June 2014 as amended by Commission Regulation (EU) 2017/1084 of 14 June 2017, the General Block Exemption Regulation.
1. Member State
3. Granting authority
The local government body authorised to grant aid is Derry City and Strabane District Council (DCSDC).
4. UK Legal Basis
The relevant legal powers under which support will be provided under this scheme are contained in:
• Article 8 of the Local Government (Miscellaneous Provisions) (Northern Ireland) Order 2002- Powers of District Councils in relation to Economic Development.
5. EC Legal Basis
All aid provided to this Project will be within the limits and conditions set out in Commission Regulation (EU) 651/2014, of 17 June 2014 (as amended by Regulation 2017/1084 on 14 June 2017) declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty (General Block Exemption Regulation).
6. Project Name
CODA (Operations) Limited annual operating aid.
7. Total eligible Costs
8. Amount of aid
9. Grant Recipient
CODA (Operations) Limited - Company Registration NI601585
10. Project Aim
To increase the mobility of European Union citizens and the connectivity of the Derry City and Strabane District Council area and the wider North West Region of the island of Ireland and provide an important access point for intra- Union flights, thereby contributing to the economic development of the North West City Region.
11. Project Description
The specific objectives of the project are:
• To secure accessible and affordable air connectivity for Derry/Londonderry and the wider North West City Region, as well as enabling the delivery of the ambitious objectives and outcomes in the Strategic Growth Plan 2017-2032 for the Derry City and Strabane District Council (DCSDC) area. A link to the DCSDC Strategic Growth Plan can be found www.growderrystrabane.com. The National Planning Framework Ireland 2040 explicitly recognises the North West as a cross border city region and commitment has been made by both governments to support regional development, help create jobs and promote investment in the North West of Ireland. The project is an integral part of the plan to develop the North West City Region which primarily comprises the council areas of DCSDC and Donegal County Council and is the 4th largest city region on the island of Ireland. The project is integral to the promoting and supporting a cohesive approach to the North West City Region.
• To contribute to a balanced regional economy by tackling regional infrastructure disparities and deficits enabling the City Region to contribute to the growth of the North West cross border region and Northern Ireland economies.
• To increase the mobility of European Union Citizens travelling to and from Derry City to the UK and EU Member states for business and tourism purposes.;
12. Compliance with GBER
The State aid to this project falls within the Common provisions set out in Chapter 1 and scope and conditions of paras 3, 4, 10 and 15-18 of Article 56a of the GBER – operating aid to an airport
12.1 Compliance with Chapter 1
Article 1 – The project falls within Article 1 paragraph 1(m) aid for regional airports. The project does not fall within any of the categories set out in paragraphs 2, 3 and 4 of that article.
Article 2 – City of Derry Airport is a regional airport as defined by paragraph 153 of article 2 in that it has an annual passenger traffic of less than 3 million passengers.
Article 3 - This aid that meets all the conditions set out in Chapter 1 of this regulation as well as the specific conditions in Article 56a.
Article 4 - The operating aid to CoDA does not exceed the aid intensities and aid amounts set out in article 56(a).
The airport is open to all potential users. The average annual passenger traffic for the airport during the last two financial years is less than 200,000 passengers and the aid is not expected to result in the airport increasing its average passenger numbers to above 200,000 passengers within the two financial years following the granting of the aid. The Civil Aviation Authority collects passenger information for all airports in the UK and have reported that actual passenger numbers for the financial year ending 31st March 2018 were 178,984 and for the financial year ending 31st March 2019 were 185,650.
Article 5 - The aid will be provided in the form of a grant. The operating aid provided to City of Derry Airport was increased in May 2020 due to the increased costs arising as a result of the COVID 19 pandemic. £4,000,000 will be paid by the Council in four quarterly instalments over the course of the year commencing 1 April. Any underspend is deducted from the figure which will be paid in the next financial year.
Article 6 – The GBER does not detail an incentive effect test for operating aid to airports. However, the 2014 – 2020 airport and airline guidelines detail that aid will have an incentive effect if the aid changes the behaviour of the undertakings concerned in such a way that they engage in additional activity which they would not carry out without the aid or they would carry out in a restricted or different manner or location.
CoDA is wholly owned by Derry City and Strabane District Council (DCSDC). At the end of each financial year the airport submits a request in writing to DCSDC for financial support. The request for aid is submitted on the basis that, in the absence of the aid, the airport would not be able to operate at category 1 level and indeed may not be able to operate at all. The aid will not exceed what is necessary to cover the operating losses of the airport
The aid therefore results in a material increase in the scope of the airport activity, as without the aid, the airport activity would be significantly restricted or would result in the closure of the airport.
Article 7 – The aid complies with the requirements of article 7. The eligible cost is the ‘financial support’ identified ‘in writing’ at the end of each financial year and the aid intensity is 100%.
Article 8 – This article is not applicable as CoDA is not in receipt of any other State Aid.
12.2 Compliance with paras 3,4,10 and 15-18 of Article 56a
Para 3 - The airport is open to all potential users.
Para 4 - The aid is not granted for the relocation of an existing airport nor for the creation of a new passenger airport. CoDA has operated as a regional airport in its current location since the 1970’s.
Para 10 - The airport does not operate any freight traffic.
Para 15 – The annual passenger figures for the airport are detailed in section 12.1 above and as stated, average annual passenger figures for the last two financial years do not exceed 200,000 passengers.
Para 16 – See detail regarding articles 5 and 6 above. The aid is provided in quarterly equal instalments calculated ex ante and will not increase during the period for which the aid is granted. The aid will not exceed what is necessary to cover the operating losses of the airport.
Para 17 – The Council can confirm that the aid shall not be paid out in respect of any calendar year during which the annual passenger traffic of the airport exceeds 200 000 passengers.
Para 18 – The aid is not conditional upon the conclusion of arrangements with specific airlines relating to airport charges, marketing payments or other financial aspects of airlines’ operations at CoDA.
13. Summary of aid
£4,000,000 per annum
14. Form of aid
Operating aid in the form of a grant.
15. Date of grant award
1st April 2019
16. Name and address of Granting Authority
Derry City and Strabane District Council, 98 Strand Road, Derry,