EC approves state aid to compensate Italian passenger operators

The European Commission (EC) has approved, under EU State aid rules, €687 million in support to compensate providers of commercial long-distance rail passenger services for the damage suffered during the period between 1 July 2020 and 30 April 2021 due to the coronavirus pandemic and the restrictive measures that Italy had to implement to limit the spread of the virus.

“This €687 million measure will enable Italy to compensate long-distance rail passenger operators on commercial lines for the damage suffered as a result of coronavirus related restrictions,” Margrethe Vestager, Executive Vice-President of the EC, said. “We continue working closely with Italy and all other Member States to ensure that national measures to support all sectors that were hit by the crisis, including the rail sector, can be implemented as quickly as possible, in line with EU rules”.

Since the beginning of the pandemic, the Italian government put in place an array of measures to limit the spread of the virus, including a mandatory staggered seating reservation system that cut available seats by 50 per cent, severe limitations on business meetings in person and business travels, and the cancellation of events. All these restrictions had a direct negative effect on the mobility of material passenger categories like business and leisure travellers, which are key to the business of long-distance trains. Furthermore, during the period between late December 2020 and April 2021, the government introduced a nationwide ban on interregional travels.

Due to the mandatory restrictions in place, long-distance rail passenger transport operators experienced a drop in transport volumes and revenues. During the period between 1 July 2020 and 30 April 2021, passenger numbers fell by up to 90 per cent compared to 2019, resulting in a significant drop in revenues for providers of rail passenger services. At the same time, transport operators continued to face various costs, in particular additional expenditures to implement enhanced sanitary and hygiene measures. This led to serious liquidity problems, which risk jeopardising the competitiveness of rail transport operators. 

Under the notified €687 million scheme, eligible beneficiaries will be entitled to receive compensation in the form of direct grants for the damage suffered during the relevant period. This measure follows a similar scheme that the EC approved on 10 March 2021 (SA.59346) aimed at compensating commercial rail passenger operators for the damage suffered between 8 March and 30 June 2020.

The EC considers that the coronavirus pandemic qualifies as such exceptional occurrence, as it is an extraordinary, unforeseeable event having a significant economic impact. As a result, exceptional interventions by Member States to compensate for damages linked to the outbreak are justified. The EC found that the Italian aid scheme will compensate damages that are directly linked to the coronavirus pandemic. It also found that the measure is proportionate, as the envisaged compensation does not exceed what is necessary to make good the damage.