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THE EUROPEAN COMMISSION,Having regard to the Treaty on the Functioning of the European Union, and in particular Article 108(2), first subparagraph, thereof,Having regard to the Agreement on the European Economic Area, and in particular Article 62(1)(a) thereof,Having regard to the decisions by which the Commission decided to initiate the procedure laid down in Article 108(2) of the Treaty on the Functioning of the European Union, in respect of aid SA.58101(2020/C)^note and SA.62043 (2021/C)^note,Having called on interested parties to submit their comments pursuant to the provisions cited above and having regard to the comments submitted by one interested party and other third parties,Whereas:

HAS ADOPTED THIS DECISION:

Article 1 #

The restructuring aid that the Portugal is planning to implement for the benefit of SATA Air Açores - Sociedade Açoriana de Transportes Aéreos S.A. and all its controlled subsidiaries, in the form of equity measures amounting to EUR 318,25 million and a guarantee on loans amounting to EUR 135 million, is compatible with the internal market within the meaning of Article 107(3), point (c), of the Treaty on the Functioning of the European Union (TFEU), subject to the conditions set out in Article 2 of this Decision.

Article 2 #

1.Portugal shall ensure that SATA Air Açores - Sociedade Açoriana de Transportes Aéreos S.A., and/or its subsidiaries as appropriate, fully implement, within the relevant timelines, the measures included in the restructuring plan set out in this Decision.

2.Portugal shall ensure that SATA Air Açores - Sociedade Açoriana de Transportes Aéreos S.A., and/or its subsidiaries as appropriate, fully implement, within the relevant timelines and at the latest before the end of the restructuring period on 31 December 2025, the measures limiting the distortions of competition as described in this Decision, namely:

(a)fully divesting at least 51 % of the share capital of SATA Internacional - Azores Airlines, S.A.,

(b)fully divesting the business unit that currently provides ground handling services to the airports and airfields in the Region of the Azores under the sole control of SATA Air Açores - Sociedade Açoriana de Transportes Aéreos S.A.;

(c)respecting a cap on the aircraft fleet under the control of SATA Air Açores - Sociedade Açoriana de Transportes Aéreos S.A. not exceeding a maximum of 14 aircraft and, after the sale of the shares in SATA Internacional - Azores Airlines, S.A., referred to in point (a), six aircraft;

(d)refraining from acquiring shares in any company except where indispensable to ensure the long-term viability of SATA Air Açores - Sociedade Açoriana de Transportes Aéreos S.A., and/or its subsidiaries as appropriate, and, in that case subject to the Commission’s prior approval; and

(e)refraining from publicising State support as a competitive advantage when marketing products and services of SATA Air Açores - Sociedade Açoriana de Transportes Aéreos S.A., and/or its subsidiaries.

3.Portugal shall send the Commission regular reports on the implementation of the restructuring plan every six months starting from the date of adoption of this Decision until the end of the restructuring period on 31 December 2025. Those reports shall specify, in particular: the dates of the actual disbursement of the funding committed by Portugal and the own contribution of the beneficiary; the developments on the network, market position, aircraft and capacity of SATA Air Açores - Sociedade Açoriana de Transportes Aéreos S.A.’s fleet; any deviations from the financial or operational trajectories of the restructuring plan in terms of revenues, containment of costs and cost reductions, and earnings achieved by the restructuring measures; and any corrective measures envisaged or taken by Portugal or the beneficiary where appropriate.

Article 3 #

The formal investigation procedure is closed with regard to the State aid in the form of a public guarantee to a bank loan of EUR 169 million for the rescue of SATA Air Açores - Sociedade Açoriana de Transportes Aéreos S.A. on the grounds that the procedure has become without object, since Portugal has withdrawn the notification of that State aid without putting the aid into effect.

Article 4 #

1.The three capital increases of SATA Air Açores - Sociedade Açoriana de Transportes Aéreos S.A. subscribed by the Portugal since 2017 for a total amount of EUR 72,6 million constitute State aid within the meaning of Article 107(1) TFEU.

2.That State aid was unlawfully put into effect by Portugal in breach of Article 108(3) TFEU and is incompatible with the internal market.

3.Since Portugal has already recovered the incompatible State aid from the beneficiary with interest from the date on which the three capital increases were respectively put at the disposal of the beneficiary until their actual recovery, the Commission has no grounds to require the recovery of the aid.

Article 5 #

Portugal shall inform the Commission, within two months of notification of this Decision, of the measures taken and envisaged to be taken to comply with it.

Article 6 #

This Decision is addressed to the Portuguese Republic.

Article 1#

Article 2#

Article 3#

Article 4#

Article 5#