The European Commission has approved a â¬ 71.4 million aid measure that will be allocated to Portugal’s national carrier, TAP Air Portugal, as financial support to help the carrier recover from damage suffered from January 1 to June 30, 2021, due to travel restrictions and other measures imposed due to the Coronavirus and its new strains.
The financial aid follows earlier financial support for the national airline, approved on April 23 and December 21, reports SchengenVisaInfo.com.
âAs part of the compensation measure, the aid will take the form of either (i) a capital injection; or (ii) a loan convertible into equity. The choice between these forms of support will be made by the Portuguese government â, the statement reads.
According to the European Commission announcement, the damage caused by the rapid spread of the Coronavirus and its new strains is considered an exceptional event. Therefore, all measures to compensate Member States for damage caused by the virus are justified.
âThe Commission noted in particular that the Portuguese measure would compensate for the damage directly linked to the coronavirus epidemic. He also found that the measure is proportionate, because the compensation does not exceed what is necessary to repair the damage â, underlined the statement.
TAP Air Portugal is the country‘s largest airline, which plays an important role in tourism and the country’s economy. TAP Air Portugal accounted for over 50 percent of arrivals and departures at Lisbon International Airport.
In response to the coronavirus situation, the Commission of the European Union has approved a temporary state aid framework, in accordance with Article 107 (3) (b) TFEU to help Member States recover of the current pandemic situation.
The framework has been changed several times, on April 3, May 8, June 29, October 13, 2020, as well as January 28 and November 18, 2021.
In addition, on March 13, 2020, the EU Commission presented a Communication on a coordinated economic response to the coronavirus.
The same allows Member States to compensate companies and sectors for damage caused by exceptional events, such as those related to the coronavirus situation.
State aid rules also allow EU member states to help businesses manage urgent needs for rescue aid or other similar purposes.
Even though the aid is aimed at helping the Portuguese economy recover from the damage caused by the virus, the rapid spread of the Omicron variant to other countries has prompted several European governments to impose additional travel restrictions which may result in d ‘other difficulties, especially for the travel and tourism sector.