Brussels approves €270mn aid package to Grupo SATA

Brussels has approved a rescue package of almost EUR270 million euro (USD323 million) for Azores Airlines (S4, Ponta Delgada) and SATA Air Acores (SP, Ponta Delgada) amid ongoing investigations into past state aid to the airlines. The financial aid takes the form of a EUR12 million (USD14.3 million) Portuguese state grant as compensation for losses sustained due to COVID-19 travel restrictions, and EUR255.5 million (USD306.4 million) in additional liquidity support, the European Commission (EC) announced in a statement. At the same time, Brussels is extending an ongoing in-depth investigation into Portugal’s planned restructuring support measures of SATA to assess if they are in line with EU rules on state aid to companies in difficulty. Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “The measures we have approved today, amounting to almost EUR270 million, will enable Portugal to provide immediate support to SATA Air Açores and Azores Airlines to ensure the continuity of air connections within and to the Azores, an outermost region of the EU. At the same time, we have extended the ongoing investigation into the compliance of past measures in favour of the airlines. We will continue to be in close contact with the Portuguese authorities in this context.” SATA Air Açores and Azores Airlines, along with SATA Gestão de Aeródromos, belong to the Grupo SATA, which is controlled by the regional government of the Azores. The two air carriers provide passenger and cargo services within the Azores and to and from several national and international destinations. SATA Air Açores is focused on inter-island flights, while Azores Airlines mostly operates flights to and from mainland Portugal and international destinations. The airlines have been entrusted with public service obligations (PSOs) on domestic routes and certain routes to the mainland to ensure connectivity of the islands in the Azores. SATA Gestão de Aeródromos manages small local airports in Azores. In terms of the EUR12 million state grant, SATA will have to report back to the Commission at the end of the financial year. Any public support received in excess of the actual damage suffered will have to be returned to the Portuguese state. The grant covers losses incurred between March 19, 2020, and June 30, 2020. The EUR255.5 million consists of EUR122.5 million (USD146.9 million) to address SATA’s urgent and immediate liquidity needs until November 21, 2021, as well as EUR133 million (USD159.6 million) in liquidity support already approved by the EC on August 18, 2020. The support, in the form of a public guarantee on temporary loans or public loans, allows the company to continue providing essential services including routes subject to PSOs and services of general economic interest at local airports, ensuring the connectivity of the Azores outermost region. Meanwhile, Portugal has notified the Commission of its intention to financially support SATA’s restructuring plan. This follows the adoption, also on August 18, 2020, of the EC’s decision to investigate whether the country’s past public support measures to SATA were in line with EU state aid rules.