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The Application of the Market Economy Operator Principle in the Aviation Sector

Nicole Robins, Laura Puglisi


Keywords: market economy operator principle, MEOP, market economy investor principle, MEIP, benchmarking, pari passu, profitability analysis

Economic and financial analysis plays an increasing role in State aid assessments. It is often used to assess whether one of the criteria for State aid to exist is met − namely, whether the State’s intervention confers an economic advantage − as well as specific aspects of whether any aid is compatible with the relevant State aid rules. To determine whether a public measure confers an economic advantage on the beneficiary, the market economy operator principle (MEOP) test is often applied. The rationale behind the test is to assess whether the State is acting in the manner of a private investor. In the aviation sector, the MEOP is applied at various levels, ranging from funding provided by the State to airport owners or operators, to the relationship between publicly owned airports (or those that have received State aid) and airlines. This article provides an overview of the different levels at which the MEOP test is applied in the aviation sector, and its underlying economic and financial principles. Throughout the article, examples are provided to demonstrate how the MEOP test has been applied in practice.
Keywords: market economy operator principle; MEOP; market economy investor principle; MEIP; benchmarking; pari passu; profitability analysis

Nicole Robins heads Oxera’s State aid practice and is the partner in charge of Oxera’s Brussels office. Laura Puglisi is an experienced Consultant based in Oxera’s Brussels office, specialising in economic and financial analysis in the State aid context. Oxera is an independent economics and finance consultancy with a large State aid practice that has worked on an extensive number of State aid cases across a range of sectors and EU Member States. For correspondence: <> and <>.


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