On 11 February 2014, the European Commission ordered Poland to recover over €22million it had allocated to the building and running of a new airport in Gdynia, northern Poland. The state aid was granted by the Gdynia and Kosakowo region for the building of a new commercial airport on the site of a current military airport. The decision acts a reminder of the analysis the Commission will undertake when deciding whether state aid has been allocated legally or not.

In the present case, the Commission applied the private investor test, namely, would a private company considering the same decision be willing to make a similar investment on market terms? After analysis the Commission decided that they would not and that the state aid would fall foul of the EU state aid rules and 2005 guidelines on regional airport investment.

The Commission’s analysis focused upon the nearby existing airport at Gdansk. Gdansk airport operates at only 60% capacity and there was therefore not enough demand in the regional consumer market for the establishment of a new airport only 25km away from the existing one which was experiencing insufficient demand for its own services. A private investor would not be convinced of the business case, the state aid would therefore be a highly artificially injection of investment into an enterprise that may well be unprofitable.

It is likely the Commission decision would have been different had Gdansk operated near capacity and was able to effectively control the local market.