Commission approves €167.8 million French restructuring aid to Corsair

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The European Commission has approved, under EU State aid rules, French restructuring aid of a total of €167.8 million to airline Corsair. The aid consists of an €80 million write-off on loans that were approved by the Commission in December 2020 and €87.8 million of additional financing. The approval is subject to conditions.

The Commission approved €106.7 million in restructuring aid for Corsair in December 2020, in accordance with the Guidelines on State aid for the rescue and restructuring of firms in difficulty. This included €80 million in loans. On the same day, the Commission also approved €30.2 million in compensatory aid to Corsair for the damage suffered between 17 March and 30 June 2020 as a result of lockdown measures and travel restrictions related to the coronavirus outbreak.

In September 2023, France informed the Commission of its intention to amend the restructuring plan initially approved by the Commission. The French authorities explained that the business plan underpinning the restructuring plan was based on assumptions that were no longer confirmed, and that exceptional unforeseeable external events had a particularly unfavourable impact on Corsair. As a result, the airline was facing serious financial difficulties.

On 5 February 2024, the Commission opened an in-depth investigation to assess whether the amendment to Corsair’s restructuring plan proposed by France is in line with EU State aid rules.

The Commission’s assessment

The Commission assessed the measure under EU State aid rules, in particular the Guidelines on State aid for rescue and restructuring. The assessment focused on whether (i) Corsair provided a genuine and sufficient own contribution to the restructuring, free of State aid, (ii) the restructuring plan could restore Corsair’s long-term viability, (iii) there were adequate compensatory measures, and (iv) the measure contributed to the development of an economic activity or area.

Following the investigation and the repayment with interest of the State aid granted between 2021 and 2022, the Commission considers that the revised restructuring plan, together with further own contributions, updated viability assumptions and adequate compensatory measures, effectively addresses the concerns identified during the investigation, and ensures Corsair’s return to long-term viability by the end of the restructuring period. On that basis, the Commission concluded that the restructuring aid of €167.8 million which France intends to grant to Corsair is compatible with the internal market, subject to a series of conditions designed to limit the distortive effects of the aid on competition such as a reduction in flight rotations and slot releases.

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

Background

Corsair is a French airline based at Paris-Orly Airport and registered with the Pointe-à-Pitre (Guadeloupe) Trade and Companies Register. Corsair mainly serves the French outermost regions in the Caribbean (Martinique, French Guiana) and Africa (Réunion, Mayotte).

EU State aid rules, specifically the Guidelines on State aid for rescue and restructuring, enable Member States to support companies in difficulty, under certain strict conditions. Rescue aid may be granted for a period of up to six months. Beyond this period, the aid must either be reimbursed or Member States must notify a restructuring plan to the Commission, for assessment under the State aid rules. For restructuring aid to be approved, the plan must ensure that the viability of the company can be restored without continued State support, that the company contributes sufficiently to the costs of its restructuring and that distortions of competition created by the aid are addressed through compensatory measures, which can be structural or behavioural.

For more information

The non-confidential version of the decision will be made available under the case number SA.109662 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.