The European Commission has authorised France and Italy to grant aid for research and development (R&D) to two European helicopter manufacturers (Eurocopter in France and Agusta Westland in Italy) for the development of new, innovative, medium-weight aircraft. The Commission has decided that these measures are compatible with the EU rules on state aid, particularly as the planned public funding is justified, proportionate and without risk for competition.

Commission Vice-President in charge of competition policy, Joaquín Almunia, said: “These two helicopters will bring significant progress in terms of flight security and reduced environmental impact. They will also help to increase European know‑how in leading-edge technologies. The public support for these two highly innovative projects is fully justified.”

The projects are aimed at developing new helicopter models in the medium-weight (4-7 tonnes) segment, the Eurocopter X4 in France and the Agusta Westland AW 169 in Italy. With a view to sustainable development, they will include major technological innovations to enhance their operating performance, reduce their running costs, limit their environmental impact and boost flight safety.

In both cases, the scale of the projects is such that the investments and associated risks exceed the funding capacities of the undertakings, in a context in which the markets are wary of financing risky projects where there will only be a return on investment in the very long term. The French and Italian aid therefore makes up for a genuine market failure. In addition, the aid granted to the two undertakings is proportionate, being limited to the amounts strictly necessary to conduct the R&D projects. Moreover, it is unlikely to limit competitors’ willingness to invest in a sector characterised by significant scope for technological innovation and high growth prospects. It is therefore unlikely to distort competition.

Eurocopter X4

Public support will be granted by France under an existing state aid scheme approved by the Commission in December 2010 (case N395/2010). In view of the amount concerned, France notified the measure on 8 November 2011 with a view to providing Eurocopter with a €143 million repayable advance, covering around 30% of total costs eligible for aid (€470 million). The activities funded will consist of industrial research (14.5% of the total) and experimental development (85.5%).

The advances will be repaid in full when a pre-defined sales target is attained. Each additional delivery beyond this target will trigger the payment of a royalty fee to the Member State.

Agusta Westland AW 169

Public support will be granted by Italy under an existing state aid scheme approved by the Commission in July 2008 (case N101/2008). In view of the amount concerned, Italy notified the measure on 11 October 2011 with a view to providing Agusta Westland with a €272 million zero‑interest subsidised loan spread over 19 years.

The aid element of the loan, calculated in line with the method used by the Commission for reference rates (see IP/08/1912) amounts to around €94 million, i.e. less than 30% of the costs eligible for aid (€340 million). The activities funded will consist of industrial research (40% of the total) and experimental development (60%).

In the case of Italy, the Commission also took account of the fact that part of the AW 169 project will be carried out in regions suffering from development deficits in relation to the EU average (‘assisted’ areas under Article 107(3) of the Treaty on the Functioning of the European Union): Campania, Lazio and Apulia. The Commission took the view that the R&D activities carried out by Agusta Westland in these regions would make a positive contribution to their technological development.

Background

The two cases were treated and approved separately, but the Commission applied to them the same rules and principles, based on the State Aid Framework for Research, Development and Innovation (see IP/06/1600 and MEMO/06/441).

The non-confidential version of the decisions will be made available under case numbers SA.33467 and SA.33731 in the State Aid Register on the DG Competitionwebsite once any confidentiality issues have been resolved. New publications of state aid decisions on the Internet and in the Official Journal are listed in theState Aid Weekly e-News.