Edgars RINKĒVIČS Ārlietu Ministrs K.Valdemāra iela 3, Rīga LV-1395 Commission européenne/Europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË - Tel. +32 22991111

EUROPEAN COMMISSION

Brussels, 29.6.2017 C (2017) 4398 final

Subject: State aid SA.46408 (2017/N) – Latvia Modernisation of Riga International Airport

Sir,

1. PROCEDURE

(1) On 12 September 2016, the Latvian authorities notified to the Commission measures concerning the modernisation of the Riga Airport's infrastructure (hereinafter “the measures”), according to Article 108(3) of the Treaty on the Functioning of the European Union (the "TFEU").

(2) On 18 October 2016 and 21 December 2016 the Commission requested further information from Latvia, which was provided on 8 November 2016 and 20 January 2017, respectively.

2. DESCRIPTION OF THE MEASURES

2.1. The beneficiary

(3) Riga Airport (hereinafter: "RIX") is the largest airport in the Baltics. It is operated by the State Joint Stock Company VAS “Starptautiskā lidosta "Rīga"” and it is 100% owned by the Government of Latvia. It does not have subsidiaries, associated enterprises and it is not involved in joint ventures.

In the published version of this decision, some information has been omitted, pursuant to articles 30 and 31 of Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 of the Treaty on the Functioning of the European Union, concerning non-disclosure of information covered by professional secrecy. The omissions are shown thus […]

PUBLIC VERSION

This document is made available for information purposes only.

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(4) RIX is part of TEN-T1 core network and it is the direct beneficiary of the notified measures.

(5) RIX is the only currently operating commercial airport with scheduled flights in Latvia2.

(6) RIX provides services both to full service and low cost airlines. The annual number of passengers served in the two years before notification was 4,813,959 passengers in 2014 and 5,162,149 passengers in 2015.

(7) RIX fulfils also a support function for NATO military aircraft patrols. It is regularly used for handling NATO aircraft practice flights and has provided emergency landing assistance on several occasions. RIX also provides airport services for emergency health care and air rescue aerial works. RIX's capacity utilisation for activities considered as non-economic by the Latvian authorities is approximately 5%.

(8) RIX is located 12 km from Riga's city centre and there are numerous residential areas around the airport. Therefore, the Latvian authorities submit that noise and pollution reduction, as well as improvement of safety levels, are essential to ensure that growth in air traffic is taking place in sustainable manner.

(9) According to the business plan presented, the annual passenger growth rate at RIX is expected to be at 3.1% during 2016-2022, which is close to baseline scenario of Eurocontrol3 and 1.9% during 2023-2036 with passenger levels reaching 6.8 million in 2036.

(10) In recent years, RIX has increased the airside capacity (investments in the runway, taxiways and aprons) which fits with the long-term passenger forecast (6.8 million passengers in 2036). In the coming years it will finance from its own funds and commercial loans terminal expansion works needed to accommodate increasing passenger numbers.

(11) The distance and travelling time by land transport between RIX and the closest commercial passenger airports currently in operation in the region and providing scheduled flights are indicated in table 1:

Table 1 - Distances and travel time between Riga airport and closest surrounding airports providing scheduled flights

Airports Distance by land, in km Travel time

Riga –Vilnius 310 3h 55 min

Riga – Kaunas 270 3h45 min

Riga – Palanga 282 3h35 min

Riga – Tallinn 309 4h12 min

1 Trans - European Transport Network. 2 Liepaja Airport (216 km away from Riga airport, 2h40 min drive) and Ventspils Airport (187 km away from Riga airport, 2h 24 min drive) currently do not operate any scheduled flights. 3 Growth rate of 2.5% during 2016-2022

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(12) As the table above shows, no airport provides scheduled passenger services within a 200 km4 radius of RIX.

(13) Currently no modern rail links exist in the Baltic States which could respond to increased demand for international travel. The construction of Rail Baltica - one of the priority projects of the EU under TEN-T program - is planned to start in 2020. The route Tallinn–Riga–Kaunas would be completed in 2025 that is after the last disbursements under the notified measures. The rail connection with Warsaw will be completed in 2030.

2.2. Overview of the measures

(14) The Latvian authorities notified the financing of a set of measures with the aim to secure the sustainable and safe functioning of RIX airport.5

(15) The measures at stake involve public financing of the following activities: (i) the construction of the helicopter landing area (helipad), (ii) new explosive detection systems; (iii) the construction of a second rapid exit taxiway; (iv) the construction of the technical services building; (v) the reconstruction of landside storm water drainage system; (vi) the construction of axle lights for taxiways and aprons; (vii) the modernisation of the lightening infrastructure, and (viii) the elaboration of documentation including technical design. These supported activities are described in greater detail below.

2.2.1. Construction of the helipad

(16) The first supported activity the construction of the dedicated helicopter landing area.

(17) The total airport’s helicopter traffic was 128 movements in 2015. This traffic makes a very small share in the total number of movements (well below 1%). Out of the total helicopter traffic at least 80% includes search and rescue operation of State Border Guards and Air Forces of the National Armed Forces as well as emergency health service flights. Currently, helicopters land on the runway. Approaching aircraft have to wait in the air for landing before the runway is free.

(18) According to the Latvian authorities, the construction of the helipad will ensure fast landing of medical emergency service helicopters not interfering with aircraft movements. In addition, the construction of the helipad will help decreasing the waiting time of the approaching and taxiing aircraft and consequently reduce fuel consumption and emissions by planes.

(19) Helicopters of State Border Guards and National Armed Forces as well as helicopters involved in transportation related to medical emergencies are exempt from airport charges and service fees. Helicopters involved in commercial activities are charged

4 Šiauliai International Airport (SQQ) is located in 132 km distance from Riga Airport and driving time is approximately 2 hours. SQQ operates mainly as a military airport accommodating Lithuanian and NATO air forces. For this reason SQQ cannot provide scheduled passenger flights. The airport offers charter flights and air cargo transport services. Such services constitute only a very small part of Riga Airport’s business. 5 The implementing Regulation for operational programme adopted in 2 August 2016 foresees such measures.

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landing fees. The aircraft landing fee is the same for all types of aircraft and amounts to 2.05 EUR/tonne of maximum take-off weight. The revenue from helicopters involved in commercial activities will stay the same after construction of the helipad.

2.2.2. Equipment for explosive detection systems

(20) The second supported activity entails the acquisition of a new explosive detection system. The Latvian authorities claim that this will allow RIX to switch to the use of the systems of the highest available standard.

(21) Aviation security is important to safeguard civil aviation against acts of unlawful interference including protection from terrorism risks. Explosive detection systems help to detect and to indicate by means of an alarm specified and higher individual quantities of explosive material contained in baggage or other consignments.

(22) Section 27 of the Law on Aviation establishes that the security costs of civil aviation aerodromes financed from the State budget are determined by the government on annual basis. A special State budget program "Funds for aviation security measures" is approved every year. In the specific case, given the magnitude of expenditure, co-financing is sought from the Cohesion Fund.

(23) RIX already keeps separate accounts to separate economic activities from non-economic activities. The airport will maintain this accounting policy.

(24) Funding for the planned investments will not exceed the cost of the relevant systems and works as determined through open tender procedures.

2.2.3. Construction of the second rapid exit taxiway

(25) The third supported activity entails the construction of the second rapid exit taxiway from the runway. Thus, the length of aircraft movements will be reduced by 1 km on the runway and 1 km while taxiing.

(26) Aircraft taxiing and staying idle on the ground generates the largest amount of pollutant emissions in the standard flying cycle. According to the Latvian authorities, the construction of the second rapid exit taxiway will: (i) reduce the taxi time of arriving aircrafts with turned on engines and hence reduce emissions of hydrocarbons, hard particles and noise; (ii) result in aircraft and passenger time savings, noise reduction in the airport’s territory and its vicinity; (iii) optimise the peak hour traffic on both runway ends in bad weather conditions.

2.2.4. Reconstruction of technical services building

(27) The fourth supported activity entails the reconstruction of technical services building. Technical services will be concentrated in one of the existing buildings.

(28) According to Latvia, the existing facilities are deteriorated and therefore the reconstruction of the technical services building is needed to provide uninterrupted delivery of the aerodrome’s core functions. In addition, technical services will be concentrated in one of the existing buildings thereby improving space utilisation and energy efficiency. The reconstructed building will accommodate civil defence training premises, IT unit warehouse, Airport’s engineering networks unit, Airport’s mechanisation unit, Utilities unit and other services.

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(29) According to the Latvian authorities, this will result in lowering the buildings heat consumption and consequently greenhouse emissions.

2.2.5. Reconstruction of landside storm water drainage system including reconstruction of Muzeja Street and Pilotu Street

(30) The fifth supported activity includes the construction of a storm water drainage system in the airport and the reconstruction of Muzeja and Pilotu Streets, which connect the airport’s public parking areas with the state motor road leading to the Riga City.

(31) According to the Latvian authorities, the existing storm water drainage system has been in use for approximately […](*)6 Currently the untreated water enters the storm-water drainage system, the drainage gutters and the nearby Nerina River.

(32) Muzeja and Pilotu Streets are on the balance sheet of RIX and ensure that passengers and cargo can be transported to and from the airport. The pavements of those streets are worn out and have depressions, cracks and potholes. During street pavement repairs, the storm water drainage system will be reconstructed.

(33) The proposed works will reduce the streets' vulnerability to the impact of water and frost and will eliminate the flooding risks of landside areas and will enhance storm-water purification level.7

2.2.6. Construction of axle lights for taxiways of aprons

(34) The sixth supported activity entails the construction of axle lights for taxiways of aprons. According to the Latvian authorities, the construction of axle lights is needed for further improvement of the airside including air navigation safety in bad weather conditions.

(35) Currently axle lights are provided only for the reconstructed runway and main taxiways8. The proposed supported activity involves the construction of axle lights entirely on taxiways connecting several aprons, in order to improve navigation safety in bad weather conditions.

(36) According to the Latvian authorities, this will ensure safer and accelerated departure of the aircraft off the runway in bad weather conditions; it will reduce possible congestion of aircraft waiting for take-off and landing; and it will reduce CO2 emissions in the air including aircraft pre-flight (taxi and take-off) and arrival (approach and taxi) phases to the airport.

(1) 6 *Confidential information

7 The current water pollution level created by RIX corresponds to the B category pollution permit issued by national authority in charge of pollution permits. 8 This investment was financed from the Cohesion Fund project “Development of airport infrastructure of airport “Riga””.

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2.2.7. Modernization of the lighting infrastructure including energy efficiency activities

(37) The seventh supported activity entails modernising the lighting infrastructure, including the replacement of existing gas discharge lamps to 560 W LED (light-emitting diode) lamps in the airport and the introduction of LED lighting also in the landside area of the airport, in order to improve energy savings.

(38) According to the Latvian authorities, this will enable the provision of uninterrupted lightening of the airside and landside of the airport, which will improve accessibility and operational efficiency of the public infrastructure and it will mitigate the negative impact on the environment. As the energy efficiency lamps can be monitored with a computer based system this will enable to reduce the 1000 W lamps used to 350W lamps.

2.2.8. Technical design activities related to investments in airport infrastructure

(39) The eight supported activity entails the elaboration of documentation including technical design in to the seven other activities.

2.2.9. Overview of the overall costs of the notified measures and State aid budget

(40) The cost of supported activities and planned State aid are detailed in table 2:

Table 2: Investment costs (indicative estimates, subject to results of public tenders) and planned State aid

No Name of the activity Total, EUR

1 Construction of helicopter landing area (helipad) 411 765

2 Equipment for explosive detection systems 9 125 756

Investments related to activities that Latvia considers as non-economic, total 9 537 521 3 Construction of the second rapid exit taxiway 4 822 429

4 Construction of technical services building 2 200 000

5 Reconstruction of Muzeja street and Pilotu street (including reconstruction of landside storm water drainage system) needed to access the airport

1 489 060

6 Construction of axle lights for taxiways of aprons 3 900 000

7 Modernization of the lighting infrastructure including energy efficiency activities

800 000

8 Elaboration of documentation including technical design 300 000

Investment costs related to activities that Latvia considers to be of economic nature, total

13 511 489

Including maximum State aid (25%) 3 377 872

(41) The public financing of activities considered to be non-economic will amount to a maximum of EUR 3 377 872. The Latvian authorities will provide a grant, financed

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from the Cohesion Fund9 and a bridging preferential loan provided by the State Treasury (loan to be subsequently replaced by the Cohesion Fund financing).10

(42) The cumulative aid intensity will not exceed 25% (the Cohesion Fund financing will initially amount to 23.45% and a "bridging" preferential loan provided by the State Treasury will amount to 1.55%). The overall aid amount will is approved by granting act issued by the granting authority, the Central Finance and Contracting Agency. The entire amount of the State Treasury loan is considered as State aid by the Latvian authorities as it will be subsequently replaced by the Cohesion Fund financing (grant) once the performance framework is fulfilled.

(43) The disbursement of the support is expected in three tranches (starting with 2017) and will at the latest be completed by the end of 2020.

(44) The rest of the investment costs (at least EUR 10 133 617) will be financed by the beneficiary through loans without guarantees of the Latvian State.

(45) The planned support will not exceed the funding gap as calculated by the Latvian authorities.

(46) The funding gap was calculated on the basis of the assumption that investment phase will take three years (2017-2019) and an operational phase (2020 – 2040).

(47) The funding gap has been calculated on the basis of extra costs (net of extra revenues) which result from undertaking the supported activities.

(48) As the project involves EU funding, the calculation was done in real prices using the Directorate General for Regional and Urban Policy Guide to Cost-Benefit Analysis of Investment Projects, 2014 methodology. The applied real financial discount rate is 4%.

(49) On the basis of these assumptions the difference between the positive and negative cash flows over the lifetime of the investment in net present value terms is EUR […](or 75-90%). Even using a lower discount rate, the funding gap would still be above […]%.11

(50) As to the construction of the second rapid exit taxiway, the measure will have only marginal impact on operating revenue of the airport. It is assumed that construction of the second rapid exit taxiway will avoid diverting three aircraft landings to alternative airports per year due to bad weather conditions. This will result in annual retained operating revenues in amount of EUR […](real prices) which is not sufficient for

9 The Investments into Riga International Airport infrastructure are envisaged under the investment priority measure 6.1.2. “Improvement of security and environmental performance in the International Airport “Riga””, Priority axis “Sustainable transportation system”, Operational programme “Growth and Employment” co-financed from the Cohesion Fund. 10 Point 10 of Regulations of the Cabinet of Ministers No 510 of 02.08.2016 (the legal basis of the State aid measure) provides that the amount of the performance reserve funding can be pre-financed by a loan of the State Treasury, which shall be replaced by the Cohesion fund financing if the performance framework is fulfilled. 11 Even under a purely hypothetical assumption that no equity financing is involved and the weighted average cost of capital is equal to […]% (lowest commercial interest rate so far obtained by RIX), the funding gap would have been 75.15%.

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financial viability of the investment, even if it is clearly desirable from the environmental and safety perspective.

(51) As to the reconstruction of technical services building, the proposed investment activity will generate incremental annual savings of EUR […]in real prices they will not be enough to offset the required capital investment for the reconstruction of the technical services building (EUR […]) and subsequent interest payments for the debt financing of proposed investment.

(52) As to the reconstruction of landside storm water drainage system including reconstruction of Muzeja Street and Pilotu Street, in the situation without reconstruction (capital repair) of the landside storm water drainage system and Muzeja and Pilotu streets periodic repairs will be needed once in seven years and the cost per periodic repair is nearly EUR […] in real prices. Besides, small maintenance repairs of streets will be needed (EUR […] per year in real prices). These costs are included as operating and maintenance cost savings in the funding gap analysis.

(53) As to the axle lights, after the introduction of axle lights the service of “follow me” vehicles to guide an aircraft for taking-off and landing will be reduced. Normally […] "follow me" vehicle will only be needed compared to […] which are used currently. While this will generate nearly EUR […] savings per year, they will not be sufficient for recovering investment cost.

(54) As to the modernization of the lighting infrastructure including energy efficiency activities, the net operating cost savings will amount to EUR […] in real prices which is not sufficient to compensate the required capital investment for the modernization of the lighting infrastructure (EUR […]) and subsequent interest payments for the debt financing of proposed investment. The estimated investment payback period of […] years would postpone the airport’s decision to replace the current lighting system at least 10 years later when its useful lifetime will expire.

(55) The calculations were done taking as a basis a counterfactual scenario where the airport operator would be driven by profit maximisation considerations and would only proceed with minor investments in drainage systems, technical buildings, etc. in the coming years12. Investments in energy efficient lighting would be postponed at least […] years13. Investments in second rapid exit taxiway and axle lights for taxiways of aprons would not be carried out at all or in any case – not in the foreseeable future14. Consequently also expenditure related to technical design of the new infrastructure would not be undertaken.

12 E.g. instead of capital renovation of the drainage systems only periodic renovation each […] years would be carried out; as regards consolidation of different support functions in one building, while the measure would lead to a positive impact on operating costs, it will not be sufficient to recover capital costs. 13 The very long pay-back period of this investment would postpone the airport’s decision to replace the current lighting system until its useful lifetime will end. 14 At RIX level, in monetary terms, the benefit of construction of the second rapid exit taxiway will be limited to preventing revenue loss from diverting approximately three aircraft landings to alternative airports per year due to bad weather conditions. As regards axle lights, after their introduction the need for services of “follow me” vehicles will decrease but cost savings will not be sufficient to recover investment costs.

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(56) The implementation of the proposed investments of an economic nature15 presents a funding gap of up to EUR […], as illustrated in table 3.

Table 3: Capital cost funding gap in EUR

Total investment costs of economic nature -13 511 489 Total investment costs of economic nature (discounted) […]

Total incremental operating revenues (O&M cost savings) (discounted)

[…]

Total incremental operating costs (discounted) […]

Funding gap (NPV) […] Funding gap rate […]

Nominal investment aid 3 377 872

Investment aid (NPV) 16 […] Funding gap with investment aid (NPV) […

(57) The beneficiary would not be able to carry out the aforementioned investments on its own, based on the business plan. Even if the notified measures take place in the context of the expansion of the airport (see recitals (9)(10)), they do not lead to expansion of the airport capacity and only marginally generate additional revenue.

(58) The remaining funding gap after State aid will reduce the return on equity until 2022 (especially due to the front-loaded investment). However, in the long run the airport is expected to reach the market return on equity. No operating subsidies will be provided for RIX.

(59) The proposed support is set out in Latvia's Partnership Agreement17 and the "Operational Programme for the European Union Funds' Investments in 2014-202018

(the European Regional Development Fund, the European Social Fund and the Cohesion Fund). Regulation (EU) No 1300/2013 of the European Parliament and of the Council of 17 December 2013 on the Cohesion Fund19 allows EU support for investments in TEN-T infrastructure, including investment in airport infrastructure related to environmental protection or accompanied by investment necessary to mitigate or reduce its negative environmental impact (Articles 1 and 2).

(60) All publicly co-financed works will be tendered out in an open and non-discriminatory procedure. As Latvia have not yet completed the transposition of EU 2014 public procurement directives, the Latvian authorities provided a commitment that the currently applicable national provisions on public procurement will be interpreted, to the extent possible, in the light of the respective rules stipulated in the EU 2014 public procurement directives.

15 Costs deemed of economic nature by the Latvian authorities. 16 As aid will be disbursed over a five years' period its net present value will be smaller than nominal value. 17 http://ec.europa.eu/contracts_grants/pa/partnership-agreement-latvia-summary_en.pdf 18 http://ec.europa.eu/regional_policy/en/atlas/programmes/2014-2020/latvia/2014lv16maop001 19 OJ L 347 of 12 December 2013, p. 287.

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(61) RIX submitted the application for aid on 21 October 2016 to the granting authority - Central Finance and Contracting Agency. Central Finance and Contracting Agency made the decisions regarding the approval of the aid application on 22 November 2016, 9 December 2016, 20 December and 23 December 2016. RIX will start implementation of the supported activities in February 2017 (with the launch of the technical design procurement procedure). Works are planned to start in 2018.

(62) The temporary preferential loan from the State Treasury is part of a single aid award (see recital (42)) as the overall aid amount will be approved by a granting act issued by the granting authority – Central Finance and Contracting Agency, therefore any decision taken by the State Treasury on issuance of the preferential loan shall not be considered as separate granting act. The aid cannot be cumulated with any other aid from local, regional, national or Union sources in respect of the same eligible costs.

2.3. Legal basis

(63) The legal basis for the financing of the investment project are Regulations of the Cabinet of Ministers No 510 of 02.08.2016 “Implementation regulations of the specific support measure 6.1.2. “To increase security and environmental performance of the International Airport “Riga””, Priority axis “Sustainable transportation system”, Operational programme “Growth and Employment”.

3. ASSESSMENT OF THE MEASURES

3.1. Existence of aid

(64) By virtue of Article 107(1) TFEU "any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market."

(65) The criteria laid down in Article 107(1) TFEU are cumulative. Therefore, in order to determine whether the notified measures constitute State aid within the meaning of Article 107(1) TFEU all of the following conditions need to be fulfilled. The financial support must:

- be granted by the State or through State resources, - favour certain undertakings or the production of certain goods, - distort or threaten to distort competition, and - affect trade between Member States.

(66) In the following sections the Commission will assess whether the measures described

above meet these cumulative criteria and thus constitute aid in the meaning of Article 107 (1) TFEU.

3.1.1. Notion of undertaking and economic activity

(67) According to settled case law, the Commission must first establish whether RIX is an undertaking within the meaning of Article 107 (1) TFEU. The concept of an

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undertaking covers any entity engaged in an economic activity, regardless of its legal status and the way in which it is financed20. Any activity consisting in offering goods and services on a given market is an economic activity.21

3.1.2. Notion of an undertaking

(68) It is settled case law that the operation of an airport, including the provision of airport services to airlines and to the various service providers within airports, is an economic activity.22 In its "Leipzig-Halle airport" judgment the Court of Justice confirmed that the operation of an airport for commercial purposes and the construction of airport infrastructure constitute an economic activity23. Once an airport operator engages in economic activities, regardless of its legal status or the way in which it is financed, it constitutes an undertaking within the meaning of Article 107(1) TFEU, and the Treaty rules on State aid therefore apply24.

(69) The Commission notes that the airport infrastructure and equipment are operated by the beneficiary which charges fees for the use of these infrastructures and exploits the airport commercially. It follows that the beneficiary is an undertaking for the purposes of Article 107 (1) TFEU.

3.1.3. Economic activity

(70) While RIX must be considered to constitute an undertaking for the purposes of Article 107(1) TFEU, it must be recalled that not all the activities of an airport owner and operator are necessarily of an economic nature.25

(71) Activities that normally fall under the responsibility of the State in the exercise of its official powers as a public authority are not of an economic nature and in general do not fall within the scope of the rules on State aid.26 According to the 2014 Aviation Guidelines, activities such as air traffic control, police, customs, firefighting, measures designed to protect civil aviation from acts of unlawful interference, and investment in

20 Judgment in case Commission v Italy, C-35/96, ECLI:EU:C:1998:303, para 36; judgment in case Höfner and Elser, C-41/90, ECLI:EU:C:1991:161, para 21; judgment in case Fédération Française des Sociétés d'Assurances v Ministère de l'Agriculture et de la Pêche, C-244/94, ECLI:EU:C:1995:392, para 14; judgment in case Job Centre, C-55/96, ECLI:EU:C:1997:603, para 21.

21 Judgment in case Commission v Italy, C-118/85, ECLI:EU:C:1987:283, para 7; judgment in case Commission v Italy, C- 35/96, ECLI:EU:C:1998:303, para 36. 22 Judgment in case Aéroports de Paris v Commission ECLI:EU:T:2000:290, T-128/89, confirmed by judgment in case C-82/01, ECLI:EU:C:2002:617. 23 Judgment in case Mitteldeutsche Flughafen and Flughafen Leipzig-Halle v Commission, C-288/11, ECLI:EU:C:2012:821; see also judgment in case Aéroports de Paris v Commission, C-82/01, ECLI:EU:C:2002:617, and judgment in case Ryanair v Commission, T-196/04, ECLI:EU:T:2008:585. 24 Judgment in cases C-159/91 and C-160/91, Poucet v AGV and Pistre v Cancave, ECLI:EU:C:1993:63 .

25 Judgment in case Fluggesellschaft v Eurocontrol, C-364/92 SAT, ECLI:EU:C:1994:7. 26 See also point 35 of the Communication from the Commission, Guidelines on State aid to airports and airlines (OJ C 99, 4.04.2014)

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the infrastructure and equipment needed for such activities are regarded, as a general rule, as not being economic in nature27.

(72) The Aviation Guidelines also stipulate that, so as not to constitute State aid, the public financing of such non-economic activities must be strictly limited to compensating the costs to which they give rise and must not lead to undue discrimination between airports. The Aviation Guidelines clarify with regard to this second condition that, when it is normal under a given legal order that civil airports have to bear certain costs inherent to their operation, whereas other civil airports do not, the latter might be granted an advantage, regardless of whether or not those costs relate to an activity which in general is considered to be of a non-economic nature28.

(73) As already decided by the Commission in its previous decisions, including its recent

decision concerning the airport of Vilnius29, the financing of security systems may legitimately be regarded as falling under the responsibility of the State in the exercise of its official powers as a public authority.

(74) In case of RIX, the activities financed by the State pursuant to Section 27(7) of the Law on Aviation involve the protection of civil aviation from acts of unlawful interference including through the use of explosive detection systems (scanners). The Latvian authorities have confirmed that the State finances such security equipment in other Latvian airports.

(75) These activities may legitimately be regarded as falling under the responsibility of the State in the exercise of its official powers as a public authority. Consequently, Latvia may legitimately regard these tasks as non-economic.

(76) As regards the helipad, it will almost exclusively be used for rescue/military purposes and there will be no revenue from helicopters used of State Border Guards and National Armed Forces as well as helicopters involved in transportation related to medical emergencies.

(77) The non-economic use of the helipad will normally be at least 80%. As mentioned in point 207 of the Commission Notice on the notion of State aid30 "if, in cases of mixed use, the infrastructure is used almost exclusively for a non-economic activity, the Commission considers that its funding may fall outside the State aid rules in its entirety, provided the economic use remains purely ancillary". Therefore, given that the helipad is almost exclusively used for non-economic purposes, such as search and rescue flights by public agencies for which no airport charges are due, it is therefore not constructed with a view to commercial exploitation.

(78) The Commission also notes that the financing of the security equipment and the construction of a helipad will be strictly linked to the relevant investment costs as will be specified through a public tender procedure.

27 Point 35. 28 Points 36 and 37. 29 See recitals 50-52 of the Commission decision of 25.08.2015 in case SA.40197 (2016/N), OJ C425 of 18.11.2016 (recitals dealing with security equipment). 30 Commission Notice on the notion of State aid as referred to in Article 107(1) of the Treaty on the Functioning of the European Union (2016/C 262/01), OJ C 262 of 19.7.2016, p.1.

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(79) Finally, the Commission notes that the public financing of non-economic activities will not lead to undue discrimination between Latvian airports as RIX is the only currently operating commercial airport in Latvia and as other airports31 are financed as undertakings entrusted with the operation of services of general economic interest32.

(80) The financing of the security equipment and the construction of a helipad are therefore not of an economic nature and in general do not fall within the scope of the rules on State aid.

3.1.4. Use of State resources and imputability to the State

(81) The funding for the proposed measures will come partially from the Cohesion Fund. Funding from the Cohesion Fund is considered as State resources imputable to Member States based on well-establish decisional practice given that they transit through national budget and the discretion the national authorities have in selecting activities to be supported33. The funding thus involves State resources and is imputable to the State.

3.1.5. Economic advantage

(82) With the exception of the investments related to the exercise of public powers, the notified measures reduce the investment costs that the airport operator of RIX would normally have to bear if it wanted to expand, modernise the airport and improve its safety or improve its efficiency, and they therefore confer an economic advantage on the airport operator.

3.1.6. Selectivity

(83) Article 107 (1) TFEU requires that a measure, in order to be defined as State aid, favours "certain undertakings or the production of certain goods". The Commission notes that the above-mentioned economic advantages would be granted to the beneficiary only. Thus it is a selective measure within the meaning of Article 107 (1) TFEU.

31 Liepaja Airport and Ventspils Airport 32 Airports financed based on provisions of the Commission Decision of 20 December 2011 on the application of Article 106(2) of the Treaty on the Functioning of the European Union to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest, OJ L 7, 11.1.2012, p. 3–10. 33 The resources of the Cohesion Fund which are transferred to the relevant national authority or body designated for that purpose by the Member State before being paid to the beneficiary are considered to be at the disposal of the national authorities and therefore amount to State resources, see e.g. point 19 of decision of the Commission of 27.04.2010 in case SA.30358 (2010/N) Riga airport, OJ C147 of 02.06.2010, p.22; point 48, decision of the Commission of 22 February 2012 in case SA.30742 (2010/N) Klaipeda port, OJ C 121, 26.4.2012, p.1; point 38, decision of the Commission of 9.11.2011 in case SA.32632 (2011/N) ETGE, OJ C 82, 21.3.2012, p.2.

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3.1.7. Distortion of competition and effect on trade

(84) When aid granted by a Member State strengthens the position of an undertaking compared with other undertakings competing in the internal market, the latter must be regarded as affected by that aid. In accordance with settled case law34, for a measure to distort competition it is sufficient that the recipient of the aid competes with other undertakings on markets open to competition.

(85) Indeed, the beneficiary competes at least to some extent with other airports in the region, even if competition is not intense given the considerable distances between airports in the Baltic region. Public financing will enable that airport to continue operating and will strengthen the airport’s position vis-à-vis other airports. Hence, the notified measure is liable to have an effect on competition and trade.

3.1.8. Conclusion

(86) The financing of the investments in the security equipment and the construction of helipad, indicatively amounting to EUR 9 537 521, does not constitute State aid within the meaning of Article 107(1) TFEU.

(87) The public funding of other investments in infrastructure at RIX, indicatively amounting to EUR 3 377 872, constitutes State aid within the meaning of Article 107(1) TFEU.

3.2. Lawfulness of the aid

(88) The Commission notes that the relevant support scheme was granted in December 2016, before receiving the Commission's authorisation. Therefore Latvia has not complied with the obligation laid down in Article 108(3) TFEU.

3.3. Compatibility of the aid

(89) Article 107(3) (c) TFEU stipulates that "aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest", may be considered to be compatible with the internal market. The Commission performs a balancing test, weighing positive effects in terms of a contribution to the achievement of well-defined objectives of common interest and negative effects on trade and competition in the internal market. In this regard, Commission takes into account the following cumulative conditions when assessing the measure at stake, referred to in the points 84 to 108 of the 2014 Aviation Guidelines35:

(a) contribution to a well-defined objective of common interest: a State aid measure must have an objective of common interest in accordance with Article 107(3) TFEU;

34 Judgement in case Vlaams Gewest, T-214/95, ECLI:EU:T:1998:77. 35 Communication from the Commission, Guidelines on State aid to airports and airlines (OJ C 99, 4.4.2014).

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(b) need for State intervention: a State aid measure must be targeted towards a situation where aid can bring about a material improvement that the market cannot deliver itself, for example by remedying a market failure or addressing an equity or cohesion concern;

(c) appropriateness of the aid measure: the aid measure must be an appropriate policy instrument to address the objective of common interest;

(d) incentive effect: the aid must change 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;

(e) proportionality of the aid (aid limited to the minimum): the aid amount must be limited to the minimum needed to induce the additional investment or activity in the area concerned;

(f) avoidance of undue negative effects on competition and trade between Member States: the negative effects of the aid must be sufficiently limited, so that the overall balance of the measure is positive;

(g) transparency of aid: Member States, the Commission, economic operators, and the public must have easy access to all relevant acts and to pertinent information about the aid awarded.

(90) Investment aid granted to airports will be considered compatible with the internal market pursuant to Article 107(3) (c) TFEU provided that the above-mentioned cumulative conditions are met. The Transparency criteria in points 162 and 163 of the 2014 Aviation Guidelines have been amended by the Transparency Communication.36 Compatibility with these amended criteria will be assessed below (recitals (137)-(138)).

Contribution to a well-defined objective of common interest

(91) Under point 84 of the Aviation Guidelines, investment aid to airports will be considered to contribute to the achievement of an objective of common interest if it (a) increases the mobility of Union citizens and the connectivity of the regions by establishing access points for intra-Union flights; or (b) combats air traffic congestion at major Union hub airports; or (c) facilitates regional development.

(92) According to the Latvian authorities, RIX plays an important role in the Latvian transportation system and in Latvian economy as a whole, given that it is the only Latvian airport offering scheduled passenger flights. As Latvia is situated at the outskirts of the EU, it is essential to maintain the air connections, especially when taking into account that currently there are no high-speed rail connections.

(93) In the absence of high speed rail connections and given the large distance from other EU airports, RIX is also a key access point to grant the large number of Latvian citizens studying and working abroad access to the EU single market. According to the

36 Communication from the Commission amending the Communications from the Commission on EU Guidelines for the application of State aid rules in relation to the rapid deployment of broadband networks, on Guidelines on regional State aid for 2014-2020, on State aid for films and other audio-visual works, on Guidelines on State aid to promote risk finance investments and on Guidelines on State aid to airports and airlines of 21.5.2014, OJ C 198 of 27.6.2014, p 30.

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Latvian authorities, in order to accommodate increasing mobility of the Union citizens, evidenced by steady passenger traffic growth, further important investments are necessary, in addition to those approved by Commission decision in State aid case N40/2010 for programming period 2006-201337 as modified by Commission decision in State aid case in State aid case SA.36297 (2013/N)38.

(94) According to the Latvian authorities, financing of a set of notified measures aims to secure the sustainable and safe functioning of RIX airport, with passenger numbers set to grow up to 7 million passengers per annum. The financing of the above mentioned investments in infrastructure will maintain and improve the accessibility of the region in a sustainable way. They will complement the past investments enhancing air-side capacity and future investment measures related to terminal expansion. Given the limited public resources and the rules of Regulation (EU) No 1300/201339 on the Cohesion Fund40, the State aid will largely be concentrated at non-expansionary measures41, accompanying investments in airport expansion.

(95) Given the above, the Commission considers that the measures increase the mobility of Union citizens and the connectivity of the regions, in line with point 84 (a) of the Aviation Guidelines.

(96) In line with point 85 of the Aviation Guidelines, the Commission however has to assess whether the aid would contribute to the duplication of unprofitable airports or the creation of additional unused capacity in the same catchment area. Any investment should have satisfactory medium-term prospects for use and should not diminish the medium-term prospects for use of an existing infrastructure in the catchment area.

(97) The Latvian authorities have demonstrated on the basis of sound passenger forecasts that the infrastructure of RIX meets medium-term demand from airlines and passengers and that the new investment is important for ensuring the mobility in the RIX catchment area in a sustainable way.

(98) As regards the effect of the State support on the use of existing infrastructure the Commission notes that there are no airports that fall within the same catchment area.

(99) A catchment area is defined in point 25 (12) of the Aviation Guidelines as 'a geographic market boundary that is normally set at around 100 kilometres or around 60 minutes travelling time by car, but, train or high-speed train; however, the catchment area of a given airport may be different and needs to take into account the specificities of each particular airport. The size and shape of the catchment area varies from airport to airport, and depends on various characteristics of the airport, including its business model, location and the destinations it serves.''

37 Development of Airport Infrastructure of Airport "Riga" OJ C 143 of 02.06.2010, p. 23. 38 Amendments to the project of infrastructure development at the Riga international airport, OJ C3 06 of 22 10.2013, p.4. 39 OJ L 347 of 12 December 2013, p. 287. 40 These rules largely limit EU support possibilities for investments in airport infrastructure related to environmental protection. 41 Except for construction of the second rapid exit taxiway which will allow receiving more aircraft in bad weather conditions.

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(100) As stated above, there is no other airport providing scheduled passenger services within a 200 km radius of RIX.

(101) The Commission therefore concludes that the aid measures meet a clearly defined objective of common interest.

Need for State intervention

(102) Point 87 of the Aviation Guidelines stipulates that State aid should be targeted towards situations where such aid can bring about a material improvement that the market itself cannot deliver. Point 89 of the Aviation Guidelines also establishes the categories of airports that have more difficulties in securing financing for their investments without public funding.

(103) With annual passenger numbers below five million in 2014 and just above five million in 2015, RIX falls within point 89 (d) of the Aviation Guidelines under which airports with annual passenger traffic of between 3 and 5 million are usually able to cover their capital costs to a large extent but under certain circumstances public support would be necessary to cover some of their capital costs.

(104) RIX profits42 are not such as to enable it to finance the notified investments from its own means. As mentioned above, the funding gap of the project is negative, which means that proposed investment activities cannot generate net economic revenue to offset the capital investment costs during the life time of fixed assets. Considering the fact that incremental operating revenues do not cover incremental investment and operating costs, the only feasible instrument of intervention is a direct grant from public resources. Bank financing would not be feasible given that the operating savings generated by the envisaged measures would be enough to repay only a third of the principal amount of underlying loans43, in addition to interest.

(105) In addition, the present case is characterized by specific circumstances that justify State intervention. On the one hand, the evidence provided by the Latvian authorities shows that RIX has limited borrowing capability, since it faces investment needs for extension of the capacity of the airport, in particular Phase 6 of the terminal development and other activities. It should be noted in this respect that RIX's infrastructure is less developed than that of various competing airports in other Member States. On the other hand, while the investments at stake are important to ensure the sustainable and safe functioning of the airport, they would not be carried out by an airport operator only driven by profit maximization considerations (see recitals 46 to 58). Indeed, the interest of such investments goes beyond a mere economic interest and they rather motivated by public interest.

(106) This conclusion is reinforced by various other considerations:

42 In 2014 it posted a profit of EUR 0,13 million, in 2015 - EUR 1.15 million. 43 According to calculations submitted by the Latvian authorities.

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- the successful operation of RIX depends a lot on airBaltic maintaining/developing its business model which cannot be taken for granted in present context; and which further affects RIX access to private finance44.

- there is no other airport in the same catchment area and RIX is the only airport providing scheduled passenger services within a 200 km radius. Indeed, RIX is the only currently operating commercial airport with scheduled flights in Latvia and currently no modern rail links exist in the Baltic States which could respond to increased demand for international travel.

- RIX fulfils also a support function for NATO military aircraft patrols; it provides airport services for emergency health care and air rescue aerial works.

- RIX is located only 12 km from Riga's city centre and that there are numerous residential areas around the airport. Therefore, the Commission considers that noise and pollution reduction, as well as improvement of safety levels aimed at with the proposed measures, are important to ensure that growth in air traffic is taking place in a sustainable manner.

- the aid will bring a material improvement as regards sustainability and safety of the operations of the airport in the context of the growing passenger numbers.

(107) On this basis, it can be concluded that there is a need for state intervention.

Appropriateness of the aid measure

(108) Pursuant to point 90 of the Aviation Guidelines, Member States must demonstrate that the aid measure is an appropriate policy instrument to achieve the intended objective or resolve the problems intended to be addressed by the aid. An aid measure will not be considered compatible with the internal market if other less distortive policy instruments or aid instruments allow the same objective to be reached.

(109) Given the type of the necessary investments and the high funding gap, a direct grant is the most appropriate instrument to ensure implementation of the notified measures.

(110) Subsidised interest rates or credit guarantees would not be sufficient to ensure implementation of the notified measures as the revenue generated by them will not be sufficient even for covering the principal loan amount.

(111) The Commission therefore concludes that the aid measure at stake is an appropriate policy instrument.

Incentive effect

(112) Point 93 of the Aviation Guidelines requires that works on an individual investment have not have started before an application has been submitted to the granting authority. Point 94 of the Aviation Guidelines requires that it needs to be verified that the project is not economically attractive in its own right and that the investment would not have been undertaken or would not have been undertaken to the same extent without any State aid.

44 The Latvian government plans to sell its share in airBaltic in short to medium term period.

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(113) As described in recital (61), works related to the notified measures have not yet started. Hence, the formal criterion is fulfilled.

(114) Furthermore, the Latvian authorities have demonstrated that RIX could not undertake the investment measures without the aid. The financial analysis they presented (see recital (56)) demonstrates that the investment measures are not financially profitable without the aid. The additional revenues and cost savings generated by the notified measures (compared to counterfactual scenario) do not cover the investment expenses to be incurred. Accordingly, a private market investor would not undertake the notified measures.

(115) In the absence of State aid, the airport operator would be driven by profit maximisation considerations and would only proceed with minor investments in drainage systems, technical buildings, etc. in the coming years45. Investments in energy efficient lighting would be postponed at least […] years46. Investments in second rapid exit taxiway and axle lights for taxiways of aprons would not be carried out at all or in any case – not in the foreseeable future47. Consequently also expenditure related to technical design of the new infrastructure would not be undertaken in the nearest future. At the same time these investments are highly desirable for ensuring safe and sustainable operation of the growing airport.

(116) In conclusion, the aid has an incentive effect for RIX as it would not undertake the investments without the aid in question.

Proportionality of the aid amount (aid limited to the minimum)

(117) Aid is deemed to be proportional if its amount is limited to the minimum needed to induce the additional investment or activity in the area concerned. State aid to airports, as any other State aid measure, should be proportional in relation to the aimed legitimate objective in order to be cleared as compatible aid48. This means that the amount and intensity of the aid must be limited to the minimum needed for the aided activity to take place.

(118) Point 97 of the Aviation Guidelines stipulates, firstly, that the maximum permissible amount of State aid must be expressed as a percentage of eligible costs (the maximum aid intensity) and, secondly, that the eligible cost are the costs relating to the investments in airport infrastructure, including planning costs, ground handling infrastructure (such as baggage belt, etc.) and airport equipment whilst investment

45 E.g. instead of capital renovation of the drainage systems only periodic renovation each […] years would be carried out; as regards consolidation of different support functions in one building, while the measures would lead to a positive impact on operating costs, it will not be sufficient to recover capital costs. 46 The very long pay-back period of this investment would postpone the airport’s decision to replace the current lighting system until its useful lifetime will end. 47 At RIX level, in monetary terms, the benefit of construction of the second rapid exit taxiway will be limited to preventing revenue loss from diverting approximately three aircraft landings to alternative airports per year due to bad weather conditions. As regards axle lights, after their introduction the need for services of “follow me” vehicles will decrease but cost savings will not be sufficient to recover investment costs. 48 It is constant case law that the Commission can declare an aid compatible only if it is necessary for achieving a legitimate objective (cf. judgment in case Philipp Morris, 730/79, ECLI:EU:C:1980:209, paragraph 17; judgment in case Nuova Agricast, C-390/06, ECLI:EU:C:2008:224, paragraph 68; judgment in case Kronoply, T-162/06, ECLI:EU:T:2009:2, paragraph 65).

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costs relating to non-aeronautical activities (including car parks, hotels, restaurants and offices) are ineligible.

(119) The Commission notes that the notified aid will finance exclusively investment costs that are eligible under the Aviation Guidelines (see recital (40)).

(120) According to point 99 of the Aviation Guidelines, in order to be proportionate, the amount of the aid should not exceed the funding gap of the investment project. As explained above, the funding gap of the project was calculated based on the counterfactual analysis comparing “situation with project” and “situation without project”. The recalculated funding gap (NPV) is minus EUR […] and the funding gap rate is […]%. The analysis was made for the period of economic utilisation of fixed assets (25 years).

(121) According to point 101 of the Aviation Guidelines the maximum permissible aid intensity for airports with less than 5 million passengers per annum is 25%. The eligible costs amount to EUR 13 511 489 whilst the aid amounts to EUR 3 377 872 which corresponds to an aid intensity of 25%. The maximum aid intensity is therefore respected.

(122) In addition, the calculation of the funding gap submitted by the Latvian authorities identifies the various revenues, investment costs and operating costs expected to arise because of the aided project, as compared with a counterfactual scenario described above whereby the aided projects would not be undertaken. The Commission considers that the degree of detail provided by the Latvian authorities is satisfactory given the scale, types of supported investment and the competition situation in the region.

(123) The calculation covers the period of 25 years which appears to be a reasonable assumption as regards economic life-time of supported investments.

(124) The funding gap of the project corresponds to the difference between costs and revenues expected to arise because of the project, calculated using an appropriate discount rate49.

(125) The Latvian authorities have demonstrated that the proposed investment aid will not exceed the funding gap of the investment project in question (see recital (56)).

(126) As the aid amount does not exceed the funding gap over the lifetime of the project and as the aid intensity is below the permissible aid intensity, the notified investment aid is deemed proportional.

Avoidance of undue negative effects on competition and trade between Member States

(127) The negative effects of the aid must be sufficiently limited, so that the overall balance of the measure is positive.

49 Financial discount rate is 4% recommended in Directorate General for Regional and Urban Policy Guide to Cost-Benefit Analysis of Investment Projects, 2014 methodology.

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(128) According to point 106 of the Aviation Guidelines in particular, the duplication of unprofitable airports or the creation of additional unused capacity in the catchment area of existing infrastructure might have distortive effects.

(129) As explained in recital (11)(11) there are no other airports reachable from Riga within a one-hour's drive. The closest international airports are more than 250 km away and require more than 3 hours driving time.

(130) The closest airport providing scheduled passenger flights is Kaunas airport which is located 270 km away and is reachable in 3h45min drive by car.

(131) As set out in recital (13) the increasing need for international transportation cannot be absorbed by rail as rail link Rail Baltica will not yet be operational during the duration of the investment period. Therefore the financing of the above mentioned investments are needed to maintain and serve the objective of common interest (i.e. improve the accessibility of the region in a sustainable way as explained above - see recitals (92)-(101)).

(132) For the above reasons the Commission considers that the investment project will not lead to the duplication of unprofitable airports or create additional unused capacity.

(133) The Latvian authorities confirm that the airport will be continue to be open to all potential users, and is not dedicated to one specific user.

(134) On the basis of the above, the Commission therefore concludes trade is not affected to an extent contrary to the common interest.

Cumulation of aid

(135) Pursuant to point 159 of the Aviation Guidelines, aid authorised under the Aviation Guidelines may not be combined with other State aid, de minimis aid or other forms of Union financing, if such a combination results in higher aid intensity than the one laid down therein.

(136) The Latvian authorities have confirmed that the aid granted under the Aviation Guidelines will not be cumulated with any other aid.

Transparency of aid

(137) Section 8.2 of the Aviation Guidelines, as amended by the "Transparency communication"50 specifies transparency requirements which shall ensure that Member States, the Commission, economic operators and the public have easy access to all relevant acts and to pertinent information about the aid awarded thereunder. Specific criteria for the publication of relevant information are set out in point 162 of the Aviation Guidelines. Point 163 requires Member States to ensure that such information must be published after the decision to grant the aid has been taken, must

50 Communication from the Commission amending the Communications from the Commission on EU Guidelines for the application of State aid rules in relation to the rapid deployment of broadband networks, on Guidelines on regional State aid for 2014-2020, on State aid for films and other audiovisual works, on Guidelines on State aid to promote risk finance investments and on Guidelines on State aid to airports and airlines, OJ L 15, 22.1.2015, p. 103.

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be kept for at least 10 years and must be available to the general public without restrictions.

(138) The Commission notes that Latvia will comply with these conditions, as it will ensure the publication of the following information on its State aid website: full text of the aid granting decision and its implementing provisions, or a link to it; the identity of the granting authority; the identity of the aid beneficiary; the form and amount of aid granted the date of granting; the size of undertaking and its location; the principal economic sector in which the beneficiary has its activities.

(139) In practical, terms, the Latvian State aid website51 contains a link to Aid Award System Application52 managed by the Commission where the relevant data will be introduced by the Latvian authorities and kept the prescribed number of years.

(140) The aid is therefore transparent in the sense of the Aviation Guidelines.

4. CONCLUSION

(141) The Commission has decided that the financing of the investments in the security equipment and the construction of helipad does not constitute State aid within the meaning of Article 107(1) TFEU.

(142) The Commission has decided, on the basis of the foregoing assessment, not to raise objections to the aid to finance the other public investments in infrastructure at RIX as notified by the Latvian authorities, on the grounds that it is compatible with the internal market pursuant to Article 107(3) (c) of the Treaty on the Functioning of the European Union. This Decision does not prejudge the future decision(s) on funding these projects from the Cohesion Fund.

51http://www.fm.gov.lv/lv/sadalas/komercdarbibas_atbalsta_kontrole/valsts_atbalsta_parredzamiba/parredzamibas_sistema/ 52 https://webgate.ec.europa.eu/competition/transparency/public/search/home/

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If this letter contains confidential information which should not be disclosed to third parties, please inform the Commission within fifteen working days of the date of receipt. If the Commission does not receive a reasoned request by that deadline, you will be deemed to agree to the disclosure to third parties and to the publication of the full text of the letter in the authentic language on the Internet site: http://ec.europa.eu/competition/elojade/isef/index.cfm

Your request should be sent by registered letter or fax to:

European Commission Directorate-General for Competition B-1049 Brussels Belgium Fax n°: +32 (0) 2 2961242

Yours faithfully,

For the Commission Margrethe Vestager

Member of the Commission