Under the scheme created by the German federal government, transport companies will be entitled to compensation in the form of direct grants for losses of income incurred between March 1 and August 31.
Passenger numbers on German public transport routes declined by between 70% and 90% following the implementation of emergency measures by federal and state governments in March. The measures included the closure of schools and nurseries, and the implementation of social distancing rules and restrictions on working arrangements and social gatherings.
This significant loss of fare box income was compounded by contractual obligations held by operators to maintain sufficient service levels for those without alternative means of transport, as well as further additional costs incurred in the implementation of sanitary and hygiene measures.
The scheme was assessed by the EC according to European Union (EU) competition laws outlined in the Treaty on the Functioning of the European Union (TFEU), intended to prevent market distortion by member states through the favouring of certain companies or sectors.
The EC found that the scheme was proportionate to the level of the crisis, and only compensated damage resulting from the pandemic without exceeding what was necessary.
It also found that the coronavirus pandemic qualifies as an exceptional event of the kind accommodated in the TFEU Article 107(2)(b) due to its widespread and unforeseeable impact, and that such schemes are entirely justified under EU rules.
The announcement follows the implementation by the EU of a state aid temporary framework on March 19, which allows EU member states full flexibility when providing support to industries affected by the pandemic until the end of June 2021.
“Local and regional public transport providers have continued to provide essential services to citizens during the coronavirus outbreak,” says Ms Margrethe Vestager, executive vice-president for the EC. “This scheme enables Germany to compensate them for the damage suffered during the outbreak and the emergency measures put in place to limit the spread of the virus.”