State aid: Commission approves €23.5 million Hungarian wage subsidy scheme to support the aviation sector in the context of the coronavirus outbreak

The European Commission has approved a HUF 8 billion (approximately €23.5 million) Hungarian wage subsidy scheme to support the aviation sector, which has been heavily affected by the coronavirus outbreak. The measure was approved under the State aid Temporary Framework. The public support will take the form of exemptions (amounting to up to 23% of the monthly gross salary paid to the employees) from the employers’ obligation to pay social security, vocational training and rehabilitation contributions. The scheme will be open to employers that are active in the manufacturing of air and spacecraft machinery, repair and maintenance of aircraft and spacecraft, and air passenger transport, provided that they have experienced a significant reduction in their business activities due to the coronavirus outbreak in the period of April and May 2020. The scheme aims at alleviating the employers’ costs and avoiding lay-offs and at helping to ensure that employees can remain in continuous employment during the period for which the aid is granted. The Commission found that the Hungarian scheme is in line with the conditions set out in the Temporary Framework. In particular, the amount of the aid will be lower than 80% of the employees’ monthly gross salary and will be granted for a period of no longer than 12 months. The Commission concluded that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. On this basis, the Commission approved the measure under EU State aid rules. The non-confidential version of the decision will be made available under the case number SA.57767 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.