Spanish carrier Air Nostrum's fleet modernisation is being assessed by the European Commission, which suspects it might have violated state-aid regulations.
The Commission has opened an in-depth investigation over the granting of €9 million in public support to the airline from the Valencia regional administration.
This comprised a €3 million subsidy approved last year plus a further subsidy of up to €6 million for the period 2019-20.
"The measures are aimed at supporting the renewal of the airline's fleet through the acquisition of additional more environmentally-friendly aircraft," the Commission says.
But while Spanish authorities believe the funding falls under environmental-protection regulations, and does not need to be declared under state-aid rules, the Commission says candidate environmental measures need to meet certain conditions to qualify.
The Commission says it has "doubts" that the intended aid falls within the guidelines on state aid for environmental protection – in particular the need to generate an "incentive effect".
It plans to investigate whether Air Nostrum's decision, in 2017, to acquire 10 Bombardier CRJ1000s was "directly triggered" by the funding support, or whether the investment in the more environmentally-friendly option "would have been carried out in any event", irrespective of the public finance.
The Commission points out that the airline had already previously selected the CRJ1000 for an earlier fleet modernisation – without state aid.
While the regulator supports the principle of acquiring more environmentally-beneficial fleets, it says: "Granting aid in a context where a large company would have invested in any event in newer and greener [aircraft] would merely reduce the company's ordinary operating costs."
This would distort competition at the expense of taxpayers, it adds.
