July 29, 2016 / 9:59 AM / in a year

EU says Italy granted illegal state aid to airlines in Sardinia

BRUSSELS (Reuters) - European Commission said on Friday that it found support granted by Italy's Sardinia region to selected airlines was an unfair advantage, ordering that the money be recovered.

The Commission, which rules on issues of state aid in the European Union, said that Sardinia had adopted a scheme in 2010 to provide funding to the airports of Cagliari and Olbia to ensure direct air connections throughout the year.

The airports in turn compensated selected airlines to increase traffic and carrying out related marketing.

The Commission opened an in-depth investigation into the scheme in 2013.

It concluded that selected airlines received an unfair advantage. The measures were not designed to make the routes profitable without public funding and not restricted to the extra cost of opening new routes. Sardinia, the Commission said, had also not organised tender procedures to select the airlines.

It concluded that no state aid was granted to the airports because they had passed the money on.

Reporting by Philip Blenkinsop; editing by Foo Yun Chee

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